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WOLF BLITZER, HOST: It's noon in Washington, 9:00 a.m. in Los Angeles, 5:00 p.m. in London, 8:00 p.m. in Baghdad. Wherever you're watching, from around the world, thanks for joining us for LATE EDITION. We'll get to my interview with the secretary of state, Colin Powell, in just a moment, but first, the hour's top stories.

(NEWSBREAK)

BLITZER: Now back to our top story, the Middle East. Among other issues, despite today's violence, the Bush administration is expressing confidence both Israeli Prime Minister Ariel Sharon and Palestinian Prime Minister Mahmoud Abbas are committed to following the peace road map.

Earlier today, just a little while ago, I spoke with Secretary of State Powell about President Bush's plan for ending the Israeli- Palestinian conflict, the current turmoil in Iraq, and whether the president exaggerated the threat from Saddam Hussein going into the war.

(BEGIN VIDEOTAPE)

BLITZER: Mr. Secretary, welcome back from this historic trip to Europe and the Middle East.

The road map toward peace in the Middle East, has it come to a dead end, given what's happened only today with the killing of these four Israeli soldiers?

COLIN POWELL, SECRETARY OF STATE: Not at all. I think both sides now realize that this road map is an essential way to move forward. They must have something like this to achieve the president's vision.

POWELL: And both sides know that there would be terrorists out there who would try to stop progress, and even with these tragic events of the morning, we have to keep going. And I hope that both sides will keep going.

And I hope the entire world will come down on these organizations, Hamas, Palestinian Islamic Jihad, all these other organizations which leap up and take credit, and not only take credit but are responsible for these kinds of terrorist activities. We cannot allow terrorism to stop us from achieving the president's vision, the world's vision, of two states living side by side in peace.

BLITZER: Well, can Mahmoud Abbas, the Palestinian prime minister, get tough with these groups -- Hamas, Islamic Jihad, the al- Aqsa Martyrs Brigade? All of them have taken responsibility for this latest incident.

POWELL: He is planning to get tough. I think he has spoken out rather clearly that this kind of terrorism is not just directed against Israel; it's directed against the aspirations of the Palestinian people. They will never achieve their goal of having a state of their own as long as these kinds of Palestinian leaders -- Hamas, al-Aqsa Brigade, Palestinian Islamic Jihad -- all of those continue to resort to terror. That's why he called for an end to the armed intifadah.

Now he has to build up his capacity, his capability to deal with these kinds of organizations. But based on the conversations we've had with him over the past week, and the past several weeks for that matter, I know that he is committed to doing that, taking these organizations down.

BLITZER: But when you say taking them down, specifically, do you want him to engage in military action and to bring them down?

POWELL: If that's what it requires, but we have to make sure he has the capacity to do that. In the first instance, what we have to do is to make sure the entire world, the entire international community is coming down firmly on the side of peace and against terror so that there is no support for these organizations any longer.

One of the important things that came out of the president's meeting last week is that the Arab nations said they would no longer allow any kind of financial support to go to these organizations for their armed activity. That's a start.

It's going to take time. We did not arrive at peace forever last week at Sharm el-Sheikh and Aqaba, but it's a start.

And we cannot let terrorism derail us. We must punch through this terrorism, bring it under control. Both sides working against terrorism, but not lose sight of the promise of the road map.

BLITZER: Is Palestinian Authority President Yasser Arafat part of the problem, part of the solution or irrelevant?

POWELL: I'd like to think he's irrelevant, at least from the United States point of view. I recognize that he is the elected president of the Palestinian Authority, and he has standing among Palestinians. But he has now got to use whatever standing he has to make sure the terrorism doesn't derail us again, by speaking out against it.

We don't find that he has been a helpful interlocutor for peace over the years, and that's why we won't work with him, even though others in the world will.

And so we ought to watch Mr. Arafat very closely during this difficult period of getting the road map started, and see whether he is going to be a help or a hindrance.

And if he is a hindrance, if he continues to be a hindrance, then I think all the other nations who still work with Mr. Arafat have to make a judgment as to whether or not they want to work with somebody who is not assisting Prime Minister Abbas in moving forward.

BLITZER: As you know, some Israelis believe he's still calling the shots, Yasser Arafat, and giving the green light to Hamas and these other groups to continue these kinds of acts.

POWELL: I can't answer that particular charge. What I can say is we are investing in Prime Minister Abbas. We believe that he is a leader committed to peace and is not giving those kinds of signals to Hamas and the others. In fact, he has elected to take them on.

Now, he has to take them on carefully and in a way that best suits his current situation and the capability he has -- his police strength, his military strength, his political strength.

What we have to do is to isolate Mr. Arafat, and make sure he understands that if he does anything which undercuts Prime Minister Abbas, which does not allow us to achieve the promise of the road map, he has to be held to account for that.

BLITZER: Held to account -- take him out, arrest him, what do you mean?

POWELL: No, no, no, no. Held to account means the international community has to look at his failed leadership over all these decades and make a conscious decision that they will no longer in any way deal with Mr. Arafat, the way the United States has come to a conclusion that we can't deal with Mr. Arafat.

We tried to deal with Mr. Arafat. I tried for over a year, in the first part of this administration, to get him going, to see if he would not take the kinds of actions necessary to put us on a path to peace, and he failed. And we made a judgment we couldn't deal with him.

BLITZER: As you know, the Israelis were supposed to, this week, the government of Prime Minister Sharon, begin to dismantle 12 or 15, what they call "illegal outpost settlements" on the West Bank.

Do you expect them to go forward with that, in the aftermath of what happened today?

POWELL: That was the commitment they made, and I think Mr. Sharon will meet that commitment. I haven't spoken to him in the last few hours since this tragic incident overnight. But I hope we do not allow acts of terror to stop us from what both sides know they have to do to move forward. BLITZER: The Washington Post has a story this morning on the front page, which I'm sure you saw, suggesting that Paul Bremer, the chief U.S. civilian administrator for Iraq, is now going to delay getting some sort of interim Iraqi regime in place. And he's losing confidence in the former exile opposition leaders like Ahmad Chalabi and others.

What does that mean for U.S. policy, the length that the United States is going to have to stay and rule, effectively, Iraq?

POWELL: Ambassador Bremer is working with Mr. Chalabi and other members of the external opposition, but he's also working with leaders who were inside Iraq over these many years.

And what Ambassador Bremer has decided, and briefed the president on last week when we met with Ambassador Bremer, is that he has to move more deliberately. He has to reach out to more leadership circles within Iraq and put together a more broad-based council of advisers and ministers to help him begin to get the institutions of the government running.

And that will ultimately lead to a political process that will permit us to put in place an administration, and then finally turn the country back over to a fully elected government.

So Ambassador Bremer, I think, is absolutely correct in moving a little more slowly and a little more patiently to make sure that all the various groups in Iraq are represented, and that we focus on institution building and put responsible leaders into institutions.

The fact of the matter is that we are the governing authority in Iraq right now, and we have to do that well. We have to restore security. We have to make sure that people are being taken care of.

And then slowly, slowly build up. Not so slowly it's going to take us forever, but patiently and correctly build up institutions and leaders for those institutions in this council that Ambassador Bremer is proposing.

BLITZER: How long is this going to take, this process?

POWELL: I can't tell you how long there will be coalition provisional authority before we are able to turn it over to freely elected Iraqi government. And I think it's unwise to throw out a timeframe, because then people clock you on that the very next day. But I think Ambassador Bremer is on the right track, of making sure that he is talking to all the leadership groups within Iraq, to include the external opposition, and not just grabbing six guys and saying, "Here, you're now the interim administration, we're giving you this authority," until he is sure that that group represents all Iraqis, and that it has the capacity to help begin administering the country under the supervision and under the authority of the coalition provisional authority.

We and our allies picked up quite a bit of responsibility when we put in place the coalition provisional authority, and we got the U.N. resolution. And we have to use that authority wisely to make sure that we don't move so fast that we're putting in place something that is not viable. I think Ambassador Bremer is going about it the right way.

BLITZER: Was the Bush administration ill-prepared for the post- war situation in Iraq? I say that because since May 1st, when the president spoke on the Abraham Lincoln, the aircraft carrier, and declared major combat operations over, on the average, about one U.S. soldier or Marine has died a day, and many others have been injured, wounded in attacks by various groups within Iraq.

Did you not brace -- were you ill-prepared for what was expected?

POWELL: No, the president was correct when he said on the Abraham Lincoln that major combat actions were over. You're not seeing battalion- or brigade-level operations right now. You're not seeing pitch battles between large forces.

What we're seeing are some Baathist elements, some Fedayeen who were left over, some criminal elements who are attacking our soldiers, and we are taking some casualties. But these are not -- this is not major combat operations.

We are not shocked by this. We regret any loss of life or any of our young men and women being injured, but we expected that there would be a period of instability where this would be a problem. Now, we will adjust our force posture and presence, and we will adjust our activities as the situation evolves.

Some of the things that we were worried about didn't happen. There wasn't massive starvation. There wasn't massive displacement of people. We were prepared to deal with that. When that didn't happen, well, then the capacity we put in place to deal with that we took out and put in new capacity, new organizations to deal with the situations that we're facing now.

BLITZER: Ahmad Chalabi says Saddam Hussein is alive and regrouping and organizing what he calls resistance against the U.S. Is that true?

POWELL: I don't know if Saddam Hussein is alive or dead. And if he's alive, I don't know where he is. And if he's dead, I don't know where he is. I admit, perhaps Mr. Chalabi has some information that the rest of us are not aware of, but I do not know whether Saddam Hussein is alive or dead, nor does our intelligence community.

BLITZER: Speaking about intelligence, there is a big uproar over whether the intelligence was good, bad, exaggerated.

Let me play for you what President Bush said on September 26th in the Rose Garden. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraqi regime possesses biological and chemical weapons. The Iraqi regime is building the facilities necessary to make more biological and chemical weapons.

(END VIDEO CLIP)

BLITZER: This followed a DIA, a Defense Intelligence Agency, report. Among other things, one sentence in there said this: "There is no reliable information on whether Iraq is producing and stockpiling chemical weapons, or where Iraq has or will establish its chemical warfare agent production facilities."

A nuance, as all intelligence assessments usually are. But the president was categorical. Did he go too far, and did you subsequently go too far when you testified or spoke before the U.N. Security Council?

POWELL: No, the DIA sentence you made reference to is taken out of context in all of the reporting. The very next sentence after the sentence that says we're not sure what they're doing, says we have information that they have transferred chemical weapons within the last few weeks.

Let's put this in context, and then I'll get to my presentation on the 5th of February.

Iraq had chemical weapons. They used chemical weapons. They had biological weapons, they admitted it. We have no doubt whatsoever that, over the last several years, they have retained such weapons, they have retained the capability to start up production of such weapons.

And the presentation I gave on the 5th of February before the United Nations Security Council, I spent four whole days and nights at the CIA, going over all the intelligence, in order to make sure that what I presented was going to be solid, credible, representing the views of the United States of America, and I stand behind that presentation.

One element that I presented at that time, these biological vans, all I could show was a cartoon drawing of these vans, and everybody said, are the vans really there? And voila, the vans showed up a few months later, we found them.

So, slowly but surely, we are finding that capability.

Now, people are debating whether or not these vans truly are biological vans. Sure, they are. What other purpose are there? And let me give you the killer argument, as to why these vans are exactly what I said they were, and what the intelligence community said they were.

I can assure you that, if those biological vans were not biological vans when I said they were, on the 5th of February, on the 6th of February Iraq would have hauled those vans out, put them in front of a press conference, given them to the UNMOVIC inspectors, to try to drive a stake in the heart of my presentation. They did not. The reason they did not is, they knew what they were. And the intelligence community has reviewed all of the comments that have come in about those vans, and reaffirmed yesterday, to me again, through Director Tenet, that they are confident of their judgment, they are confident that these vans are exactly what we said they were.

So, there's no question that Iraq has this capability and has tried to hide it from the world. This is not only the judgment of the president and the secretary of state, it's the judgment of the United Nations that they had this capability. It's the judgment of every nation that voted for the United Nations Security Council Resolution 1441. It's -- there was the judgment of the previous administration. President Clinton made statements quite similar to what President Bush said in the statement that you just quoted.

BLITZER: One final question before I let you go: Iran, is it time for a regime change, one way or another, in Iran?

POWELL: It's up to the Iranian people to decide what's going to happen in that country. There's quite a bit of churning taking place inside Iran. Many young people -- it's a very young population. They're not satisfied with their political leadership. I don't think they continue to be satisfied with the religious leadership. They want Iran to join the rest of the world, in my judgment.

And what we have to do is keep showing to the Iranian people that there is a better world out there waiting for you, and you can become a more responsible member of the international community if you stop supporting terrorist activity and if you stop trying to develop weapons of mass destruction, such as nuclear weapons.

Iran and Syria are similar in that both of them need to stop taking actions which make it harder to get the peace process going between the Palestinian and Israelis. They've got to stop sponsoring terrorist organizations. They've got to stop providing weapons to Hezbollah. They've got to stop providing support to Hamas and Palestinian Islamic Jihad and similar organizations.

So that's the clear message we're giving to Iran, but regime change is not on our list right now. It is up to the Iranian people to decide this. And we will continue to talk to the Iranian people, as to why it is in their benefit to demand a better political system from their religious and political leaders.

BLITZER: I know you have a big trip coming up. Good luck on your next journey to South America. Thanks for joining us.

POWELL: Thank you very much, Wolf.

(END VIDEOTAPE)

BLITZER: We have to take a quick break. But when we return, the case for war against Iraq, did the Bush administration misrepresent intelligence about Iraq's weapons of mass destruction? We'll get analysis from intelligence and weapons experts. Plus, the Middle East road map, we'll talk with the Palestinian foreign minister, Nabil Shaath, and the Israeli deputy prime minister, Tommy Lapid, about whether peace is really possible this time around.

And later, Senator and former First Lady Hillary Rodham Clinton tells all. We'll get perspective on the personal and political implications of her explosive new book.

LATE EDITION continues right after this.

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BLITZER: Welcome back to LATE EDITION.

We turn now to Iraq where dramatic developments are unfolding right now. U.S. troops once again have been attacked near the troubled city of Fallujah, that's just west of Baghdad. CNN's Jane Arraf is joining us now from the Iraqi capital with late-breaking developments -- Jane.

JANE ARRAF, CNN CORRESPONDENT: Wolf, it just doesn't seem to be getting any better in Fallujah. Now the reports are that one Iraqi was killed late last night as he opened fire on U.S. forces. They shot him. And unconfirmed reports again that another Iraqi killed today. This one said to be a gun shop owner. And forces apparently opened fire after seeing that gun. We are still checking that report.

But certainly the situation is unstable in that city. It has been a hot spot. It's been a sore point for U.S. forces. And they have poured more soldiers into there. There are now more than 4,000 Army members, some of them from the 3rd ID, first into Baghdad. They thought they were going home, but instead, they were thrown into what is perhaps the worst trouble spot for American forces in Iraq.

Now people there are angry. They are angry not only because of the deaths of Iraqis -- and that goes back to an incident when forces opened fire on demonstrators in April, killing about 15 and wounding dozens. But they're also upset that they say the Americans are occupying their town.

Now, this is a Sunni stronghold. It had a lot of Baath Party members. It had a lot of secret police members. And these are people who certainly don't see a future in this Iraq, and they say they want the Americans out of that city -- Wolf.

BLITZER: Jane, is this just sporadic, isolated incidents? Or does it seem to be some coordination? You heard the secretary of state, Colin Powell, just tell me here on LATE EDITION that it doesn't seem like it's very well organized. These are just remnants of the Baath Party and the Fedayeen.

ARRAF: They had said originally that these were remnants of the Baath Party and Fedayeen. But in a sense, it seems more sporadic, not as well organized as that and perhaps more difficult to combat.

When you go into Fallujah these days, people are very quick to tell you that everyone wants the Americans out. Now, "everyone" probably is quite an exaggeration, but certainly there is a large part of that city does not want American forces there. What they say is, "We didn't want Saddam. We don't want the Americans. We don't want anybody. Just leave us alone."

So it is very difficult to tell how coordinated these attacks are. They are not just Fallujah. There is another town west called Ramati (ph). There are attacks in Baghdad.

And the real fear is that these will not die down. That there are enough different reasons to keep these attacks up that it just won't be doable to combat it by just pouring troops into a city like Fallujah -- Wolf.

BLITZER: CNN's Jane Arraf in Baghdad. Thanks, Jane, very much. I know you were in Fallujah earlier in the week. Just be careful over there.

Meanwhile, here in Washington, President Bush's top advisers are insisting Iraq did indeed possess weapons of mass destruction prior to the U.S.-led invasion that ousted the Iraqi leader, Saddam Hussein.

And as all of just saw here on LATE EDITION, this was certainly stressed by the secretary of state, Colin Powell. But not everyone is convinced.

Let's go live over to the White House. Our correspondent there, Chris Burns, is standing by with more on that -- Chris.

CHRIS BURNS, CNN WHITE HOUSE CORRESPONDENT: Well, hi, Wolf.

President Bush is due back from a relaxing, quite weekend in Camp David sometime this afternoon. But his two key foreign policy aides were very much on the attack against critics who believe, especially in light of that leaked Defense Intelligence Agency report suggesting there was no reliable information about weapons of mass destruction.

It was a mixed report, however. You must qualify that there was other information talking about the possibility that Saddam Hussein could have been producing those weapons.

In any case, Condoleezza Rice, the national security adviser, Secretary Powell, both on the attack on talk shows today in Washington.

Secretary Powell expressing outrage, saying it was outrageous that the critics would question the information that the secretary used up to the war about weapons of mass destruction as being bogus. He says there is nothing bogus about it. He spent four days and nights at the CIA putting his information together before he made his presentation to the United Nations.

Condoleezza Rice, the national security adviser talking about revisionist history, saying that the critics are trying to revise what really were the facts on the ground.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: People talked in this town a lot about connecting the dots after September 11th. If you connected the dots about everything that we knew about Iraqi weapons of mass destruction programs, going back to 1991 and going all the way up until March 2003 when we launched the attack against Iraq, you could come to only one conclusion. And that was that this was an active program, that this was a dangerous program.

(END VIDEO CLIP)

BURNS: And this program obviously taken up by the United Nations Security Council with the Security Council Resolution 1441, which called for Iraq to strip itself of any weapons of mass destruction, which brought in those weapons inspectors. And because that did not go through, the U.S. did carry out its preemptive war against Iraq to prevent any kind of weapons from being destroyed.

But of course, remains the question is, where are the weapons? Where is that weapons program? And that has yet to be answered -- Wolf.

BLITZER: Chris Burns at the White House with that.

Chris, thanks very much.

Much more coming up here on LATE EDITION, including the search for Iraq's chemical and biological weapons. Where are they right now? We'll get insight from intelligence and weapons experts.

And later, Martha Stewart vows to fight criminal charges stemming from a controversial stock sale. But can she win in both the court of law and the court of public opinion? We'll get several perspectives.

LATE EDITION continues, right after a quick check of the hour's headlines.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Up next, did the Bush administration mislead the world about Iraq's weapons of mass destruction? We'll get answers from our intelligence and weapons experts.

Also, we're looking for your response to our LATE EDITION web question of the week: Is Martha Stewart being treated unfairly? You can vote at our web address, cnn.com/lateedition. And we'll tell you the results later on LATE EDITION.

Our program will return right after a quick break.

(COMMERCIAL BREAK)

BLITZER: Once again, our LATE EDITION web question of the week is this: Is Martha Stewart being treated unfairly? You can vote. Go to our web address, cnn.com/lateedition. We'll have the results later in this program.

Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

It's been two months since the fall of Saddam Hussein's regime, but so far the search for his weapons of mass destruction has come up largely empty.

Joining us now to talk about the implications of this are three guests: Ken Adelman, the former director of the U.S. Arms Control and Disarmament Agency; Patrick Lang is a retired U.S. Army colonel, a former chief Middle East analyst with the Defense Intelligence Agency, over at the Pentagon; and David Albright is a former United Nations weapons inspector.

Gentlemen, welcome back to LATE EDITION.

Pat, let me begin with you. The DIA a lot in the news now because of this caveat summary, this intelligence summary we got ahold of this past week. The secretary of state says he stands precisely by what he says.

Were they right, the top Bush administration officials, when they categorically said Iraq has weapons of mass destruction under Saddam Hussein?

PAT LANG, FORMER CHIEF MIDEAST ANALYST, DIA: Well, I don't know if they're there or not. I mean, the event will prove that to be true or not, depending on how the search continues to go. But when you're dealing with intelligence documents from the major intelligence agencies, you have to look at the language with great precision in this thing.

The thing from DIA, of course, fascinates me since I used to be there. And when they say we have no reliable information about such- and-such, they are telling you that, with regard to that question, they have no opinion. They're not going to say anything about it.

And if in the next sentence, as the secretary said, they say we have information that weapons were transported to units, and there is no reliable or some such similar qualifier in front of the word, what that means is that they do have information, but they're not sure if it's true or not.

So, and to some extent, this is -- when you're looking at things from the intelligence community, you want to know what the analysts really think, you have to kind of look inside the document to its internal to see what it actually says.

BLITZER: But did the administration go too far in making hard and fast statements in advance of the war, based on what you know right now? They still haven't found any weapons of mass destruction.

LANG: Now, based on what I know right now -- although I think the war was justified, as you know -- I think that probably the judgment that they had continuing stockpiles of chemicals was probably an overenthusiastic judgment. BLITZER: What do you think about that, Ken?

KEN ADELMAN, FORMER DIRECTOR, U.S. ARMS CONTROL AND DISARMAMENT AGENCY: I that the main weapon of mass destruction was the Saddam Hussein regime. And what we saw is, since, over the last two months, is that the regime had far more massive destruction than we ever expected.

BLITZER: They killed a lot of their own people, a lot of their own Iraqis.

ADELMAN: A lot. I mean, this is the most in history...

BLITZER: But what about the chemical and the biological weapons? That's the key issue.

ADELMAN: I'll get to that. But that's the most in history, that he has killed Islamic people, OK? And that has been surprising in its magnitude.

In terms of chemical and biological weapons, the question is wrong, Wolf. It is not the Bush administration's conclusions. It was the conclusions of the British intelligence, of French intelligence, of German intelligence, of local intelligence in the area.

And it was the clear indication that the Saddam Hussein regime gave us. Because what we had said was, there is a reward, lifting sanctions, if you come clean on how you destroyed these weapons, if you destroyed them. The reward for that was about $180 billion in lifting sanctions for 12 years.

You have to ask yourself, why did he give up $180 billion? That's a big pot of money. And the only reason can be is because he had a big weapons of mass destruction program.

BLITZER: Do you want to weigh in on that?

DAVID ALBRIGHT, FORMER U.N. WEAPONS INSPECTOR: Yes. No, I think the -- particularly the information presented publicly by the administration, I believe, was exaggerated.

And also, I would take exception. Our allies weren't out there saying, "Iraq has large stockpiles of chemical and biological weapons." Their information was much more caveated. They were very critical of various reports, stated by the administration, that there was an imminent threat posed by the stockpiles.

And so, I think that, looking back, we do need to figure out who knew what, what time, and how did that get into various presidential and secretary of state speeches?

BLITZER: And yet, this is what comes to the core of the issue, the criticism coming up right now.

And let me let you respond to this, Ken.

If it was so clear, the intelligence, why haven't the U.S. and British military forces, in the past two months, found any of it?

ADELMAN: Well, because, A, they're still looking, obviously. That they're going to look at the programs and not just the evidence of the chemical and biological weapons right there.

But the point of it is that all of these resolutions, the 17 resolutions, basically said, "OK, if you destroyed weapons of mass destruction, show us." And certainly, 15 members of the Security Council...

BLITZER: All right. Pat is anxious to weigh in, as well.

ADELMAN: ... are saying they did not show us that.

BLITZER: Go ahead, Pat.

LANG: If you're going to look for programs, I mean, that's fine, I'm sure you're going to find programs. Now, I mean, the Iraqis would have been really loathe to admit to themselves and everybody else that they had given up these programs. They would have regarded this as a great humiliation, in terms of the status of the regime internally and with other Arab countries.

But a program can be anything. It can be an office. It can be an office plus labs. It could be some rudimentary production system, like these vans, which -- that's probably what they are. But that doesn't mean that they actually still held large stockpiles of this stuff.

ADELMAN: Well, the U.N. has concluded, and the inspectors concluded absolutely categorically, in the 1990s they had this stockpiled. OK, there's no doubt.

ALBRIGHT: They didn't conclude that.

(CROSSTALK)

BLITZER: Well, in '98, what the U.N. inspectors said when they left Iraq was that there were unaccounted-for thousands of liters of anthrax and VX and mustard gas. They don't know where it is. The Iraqis claim they destroyed it, but they didn't have any evidence, the Iraqi government of Saddam Hussein, to back that up. Is that right?

ALBRIGHT: That's right. And if you look at the nuclear weapons program, there was an active debate, did Iraq reconstitute its nuclear weapons program? But the inspectors weren't saying, "Yes, they did, and we know that for certain." People were expressing their own views, based on their own information, and there was serious disagreement.

And I think, in this question of stocks that existed at the time, there was real uncertainty whether there were large stocks. But there clearly were unanswered questions.

ADELMAN: There was no uncertainty about whether they showed how they were destroyed. There was no uncertainty about that, because there was no...

(CROSSTALK)

BLITZER: ... the Iraqi government could never show that. That was the cause of a lot of concern.

ADELMAN: They never tried to show it, Wolf.

BLITZER: Let's talk a little bit about what the U.S. has found in the past few weeks, these two trucks, these trailers that Powell, Colin Powell, this morning on this program, said categorically there was absolutely no other purpose for them other than the manufacture of biological or germ agents.

LANG: Well, I've met a number of people who would disagree with that, and think that there are other possible uses for these trucks, and I'm sure David will have something to say about that.

But even if they were for that, if the Iraqis were trying to construct some sort of permanent biological-warfare-generation capability, there's no evidence so far that they were actually ever in production, that they ever made anything. And what we were told before the war was that these capabilities existed and were an imminent threat to the United States.

My problem with all this stuff is, in fact, that, although there's no doubt they once had these programs and had stockpiles back around, you know, once upon a time, that in fact that there's not a real solid chain of proof that shows that they had these stocks just before the latest...

BLITZER: Well, let me let David weigh on these two trucks.

Do you have any doubt, as the secretary of state says, that these were biological-weapons development trucks?

ALBRIGHT: I think, as a preliminary finding, it's fine, but there's a lot of work that needs to be done to show that. One is, find some Iraqis who can provide credible evidence that they actually were there.

BLITZER: But they apparently did have a defector that tipped off the U.S. in advance of the secretary's speech before the U.N. Security Council.

ALBRIGHT: Yes, but they've had a lot of trouble with the credibility of a lot of these defectors. And one would hope that we could find some Iraqis who could speak knowledgeably about this.

Also, the sample analysis isn't done. And some of the purpose of that is to determine if there is evidence of other uses.

So, I think it's, as a preliminary finding, it's fine, but I think the administration is rushing forward, in some sense, the same way it did last fall. It's grabbing onto things and going out too early. ADELMAN: I don't know what they're rushing forward on. What they have said is that the world community had a unanimous view that there were weapons of mass destruction, that that was not the only reason for the war, that there were a lot of reasons for the war. In fact, on this program a lot of critics of going into the war said that they had too many reasons for going into the war. They were talking about the human rights...

(CROSSTALK)

BLITZER: All right, on that specific -- let's take a quick call. We have a caller from New York. Let's let a caller weigh in.

Go ahead, caller.

CALLER: Yes, my question is, how can you justify the loss of hundreds of young lives, based on going into this country under imminent threat, and two months later you have nothing to show for it?

BLITZER: All right. Ken, you want to weigh in?

ADELMAN: Yes, I certainly do. I mean, we have seen jails open up, prisons open up, with 10-, 11-, 12-year-old kids come out, hundreds of these kids. Why? Because their families were said to be against Saddam Hussein. And had we not liberated, those kids would spend their lives in jail.

BLITZER: So it's a human-rights issue for you?

ADELMAN: It was enormous human rights.

BLITZER: You want to talk about that, Pat?

ADELMAN: Secondly, we have seen what the peace process is...

LANG: I don't have a problem with that argument, Ken. I think...

ADELMAN: It's a good argument.

LANG: ... you know, this fascist dictatorship deserved to be removed.

There is some question as to whether or not we're going to extend that doctrine to the whole world, and of course we're not going to, because it's beyond our capability.

But my problem about all this really is the question of whether or not something went wrong in the interaction between the intelligence world and the policy world in the U.S. government in such a way that that wasn't -- things didn't go right.

BLITZER: That's a fair point. I want to talk about the nuance, the caveats that are normally included in these intelligence reports, as all three of you well know. First of all, listen to what the vice president, Dick Cheney, said last August, just as this debate was getting going here in the United States.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destructio. There is no doubt that he is amassing them to use against our friends, against our allies and against us.

(END VIDEO CLIP)

BLITZER: Now, a month later, the DIA report is considerably more nuance. Among other things, "Iraq is assessed to possess biological agent stockpiles that may be weaponized and ready for use." Another sentence taken from the DIA summary: "Iraq probably possesses CW, chemical warfare, agent and chemical munitions, possibly including artillery rockets, artillery shells, aerial bombs and ballistic missile warheads."

Pat, those are significant nuances.

LANG: Oh, yes, they really are. I mean, you know, intelligence analysts have always had a problem with their managers in their own groups who have to deal with the powerful around town. And so, oftentimes intelligence analysts will be like little children who have been kidnapped and drop bread crumbs behind them through the forest trying to show the rescuers where to find them, you know. And they -- so they stick in these qualifying words like that, so that this would indicate there was uncertainty on the part of the DIA analysts who drafted and wrote this thing.

BLITZER: Which raises -- Ken, answer this question -- which raises significant question, the allegation from some that the intelligence community was manipulated by the political leadership of the Bush administration to come up with bottom-line, hard and fast assessments that they really didn't have.

ADELMAN: OK, but you can't have it both ways, Wolf. You can't have it that it's very nuance and that they were browbeaten into being very clear. They were very nuanced on this, and that's fine, OK? But the DIA is not the only intelligence agency we have. We have lots of other intelligence agencies.

This is not the only report we had from the DIA. The DIA had lots of other reports that haven't been leaked.

And the vice president of the United States, if I may say, has to make a judgment on the basis of getting lots of information, not just from the intelligence agency. So that was Dick Cheney's view, and I admire the view.

ALBRIGHT: Yes, I think there was too much choosing by the senior administration officials of information that would serve their cause. And I think we had to follow it closely on the nuclear. My organization actually assessed that Iraq continued or reconstituted its nuclear weapons program. But we were deeply troubled by what we saw was selective use of information to basically scare people. People are scared by nuclear weapons. And it's a button, when it gets pushed, it's very hard to stop the result.

ADELMAN: But, David, your conclusions were the same as the U.S. government, the same as the Bush administration.

ALBRIGHT: No, our conclusion was that its nuanced, that maybe Iraq didn't...

ADELMAN: But your conclusion was the same. It was very nuanced, but it was the same conclusion that they were reconstituting.

ALBRIGHT: No, no, no. They were saying it was an imminent threat, they were close to nuclear weapons. They were absolutely sure of...

ADELMAN: But you were saying you were reconstituted.

ALBRIGHT: Well, but, looking back, we think we were wrong now after interviewing Iraqis in Iraq.

ADELMAN: OK.

BLITZER: I'm going to let Pat Lang have the last word, but very briefly.

LANG: Some of these threats are overstated at a very basic level. Chemical weapons are not a strategic weapon of mass destruction. They're basically a battlefield weapon. In the Iran- Iraq war, the Iraqis had laid down vast amounts of gas in order to have any affect on the Iranians.

BLITZER: But they killed a lot of Iranians and a lot of Kurds.

ADELMAN: Twenty thousand.

LANG: You know, the number of Kurds and Iranians that they killed with conventional weapons, with artillery and small arms, was a whole lot greater than what they killed with chemicals.

ADELMAN: But 20,000 deaths is a lot, you know?

(CROSSTALK)

LANG: Those numbers are subject to...

ADELMAN: OK, it's a lot of deaths.

BLITZER: All right. We've seen the pictures from Halabjah and elsewhere. Unfortunately, we have to leave it right there.

Pat Lang, thanks very much for joining us. Ken Adelman, thanks to you.

David Albright, thanks to you as well.

Coming up, a promise to follow the road map and end the violence in the Middle East. Are the Israelis and the Palestinians finally on the path toward peace? We'll get perspective from both sides.

Plus, the search for Saddam Hussein and his weapons of mass destruction. Much more coming up on that. We'll ask the chairman of the Senate Intelligence Committee, Pat Roberts, precisely what he knows.

LATE EDITION will return right after this.

(COMMERCIAL BREAK)

BLITZER: Let's get to some of your letters to LATE EDITION. Many of you are weighing in on the search for chemical and biological weapons in Iraq.

Tom from Ohio, for example, writes this: "I believe Saddam had and might still have weapons of mass destruction. I only hope that Americans find the weapons before they are used against our troops."

And Walter from Florida asks, "What's happening to the captured Iraqis featured on the Pentagon's deck of cards? Are they giving information or staying silent?" Good question. We'll try to find the answer.

We always welcome your comments. Our e-mail address is lateedition@cnn.com. And if you'd like to receive my weekly e-mail previewing our LATE EDITION programming, simply go to cnn.com/lateedition. That's where you can sign up.

Still ahead, a key ruling in the Scott Peterson murder case. We'll go inside the courtroom for legal insight.

And we're also looking to get your response to our web question of the week: Is Martha Stewart being treated unfairly? Go ahead and vote right now, cnn.com/lateedition.

More LATE EDITION coming up at the top of the hour, including the senator, the chairman of the Senate Intelligence Committee, Pat Roberts.

(COMMERCIAL BREAK)

BLITZER: He's privy to the top-secret intelligence information, Senator Pat Roberts, the chairman of the Senate Intelligence Committee. We're going to talk to him shortly.

But let's begin in Jerusalem, where dramatic developments are unfolding. The Middle East peace process is clearly facing a huge test right now, the first since last week's peace summit. Palestinian gunmen, disguised as Israeli soldiers, slipped into an Israeli army post this morning and opened fire. Our Jerusalem bureau chief, Mike Hanna, is joining us now with the late developments on that and other incidents unfolding right now -- Mike.

MIKE HANNA, CNN CORRESPONDENT: Well, Wolf, this is the most serious attack since that signing in Aqaba last week between the Palestinian and Israelis prime minister and U.S. President George W. Bush. Four Israeli soldiers were killed in the early hours of this morning when the three Palestinian gunmen opened fire. Four soldiers were wounded, too. The three gunmen were killed with retaliatory fire.

However, what is even more significant in terms of this event is that all militant organizations, the three major militant organizations, claimed joint responsibility for this attack. This is Islamic Jihad, Hamas and al-Aqsa Martyrs Brigade, issued a joint statement, a very rare occurrence, saying the attack was in protest against the implementation of the road map and also in protest against the Prime Minister Mahmoud Abbas' comments in Aqaba Wednesday, in which he said he'd get an end to the armed intifadah, as he put it.

Other incidents in course of the day: Within the last hour, an Israeli has been shot and killed in Hebron, in that divided, disputed city of Hebron. Very stern test for Mahmoud Abbas.

A test, too, for Ariel Sharon, the Israeli prime minister, facing what is likely to be a hostile Likud Party, his own party, at its convention here in Jerusalem in the course of the evening. Lots of criticism there for Sharon's statements in terms of recognizing or being willing to recognize a Palestinian state.

Nobody said it was going to be easy, but these tests on the implementation of the road map and on this new peace process are coming thick and fast, Wolf.

Shortly I'll be speaking with the Israeli deputy prime minister and the Palestinian foreign minister. Much more on this developing story coming up.

The pope, meanwhile, is continuing his historic tour through Croatia with a stop today in the port city of Rijeka. Thousands of people gathered for a special mass by the pontiff.

Joining us now live from Croatia, our Rome bureau chief Alessio Vinci. He is covering this historic journey -- Alessio.

ALESSIO VINCI, CNN CORRESPONDENT: Hello to you, Wolf.

Well, after four days here in Croatia, Pope John Paul II is beginning to feel the toll of this grueling trip -- five days -- five cities in five days. And it has been a long trip for him, which has taken him criss-crossing Croatia, meeting hundreds of thousands of people.

It was a very hot day today in Rijeka, which is, of course, a concern not just for the ailing pope but also for some of the elderly people who have been waiting for him under the sweltering sun for several hours.

Nevertheless, the pope, throughout this day, has shown some remarkable strength and endurance. He appears to draw a lot of energy from these people who are in the streets, who are out there just to even get a glimpse of him.

And as he arrived in the main square in Rijeka here, we saw these tens of thousands of people waving white-and-yellow flags, the Vatican flag, the banners with his name on it, hailing him.

As he delivered his homily, the Pope spoke in Croatian. He focused on the family today and the need to promote its essential nature.

VINCI: He spoke to ordinary people about ordinary problems, such as housing, employment, crime and drug abuse. And it is with these simple themes the pope manages to have a contact with the crowd.

Croatia, being a very young democracy, people here still feeling the aftermath of the war 10 years ago. High unemployment, as much as 20 percent; the average income here is $450. And therefore the people listening to the pope talking to them about their day-to-day problems really felt that this pope came here to Croatia just to talk to them.

Back to you, Wolf.

BLITZER: Alessio, as you know, this is the 100th trip by the pope since becoming pontiff. Any more trips planned in the coming months?

VINCI: Yes, he is. He is planning to return -- he is returning to Rome, to the Vatican on Monday. He will come back to the Balkans, to Bosnia in a few weeks time. And there will be a trip to Slovakia at some point later this year.

And Vatican officials have been instructed by the pope himself to continue planning a trip to Mongolia. That may happen at some point later in August. And that trip also may include a stop to Russia. Of course, a long-life dream of the pope to go to Russia and meet the people over there. Of course, Russia being the largest Orthodox country, the pope trying to bring together -- close together the Orthodox and the Catholic churches together again.

Back to you, Wolf.

BLITZER: All right, Alessio Vinci is covering the pontiff's visit to Croatia right now. Good luck to the pope, of course.

Thanks, Alessio, very much.

Several congressional committees here in Washington are planning hearings to investigate the quality of intelligence on Iraq's weapons of mass destruction and why they failed to turn up so far. There is also this lingering question: Is Saddam Hussein dead or alive?

Joining us now from his home state of Kansas, the chairman of the Senate Intelligence Committee, Republican Senator Pat Roberts.

BLITZER: Should your committee hold a full-scale investigation right now, given the uproar, on the state of intelligence?

ROBERTS: Well, I think you defined it very well when you said uproar. Sort of a feeding frenzy with a tad bit of politics mixed in.

I want to do this on a step-by-step basis. That would be my preference. We are going to ask for, and we have received assurance from the DCI director, George Tenet, that he will provide us and is providing us full documentation in regards to Secretary Powell's comments, the president's comments, anybody else's comments. We are going to thoroughly review that documentation.

At the same time, we have weekly hearings -- and we can make them daily, if members want -- on the WMD issue and the relationship between our collection assets, how we analyze and what happens when that so-called analytical product actually goes to the policymaker. One of the questions that I have is, what part did the Defense Department or that planning group have in the analysis of that product.

But let's do it on a step-by-step process. I think an investigation, a total investigation at this particular time is simply premature. More especially when we have the 1,400 inspectors in country and they are doing their work.

BLITZER: Some of your colleagues on the Intelligence Committee appear to disagree with you. I want you to listen to what Senator Carl Levin said on Meet the Press earlier today.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), MICHIGAN: This is such a critical issue. If our intelligence is either manipulated or if it's shaded or if in some way it is exaggerated, it is very, very dangerous for us, particularly as we go down the road and look at other threats.

(END VIDEO CLIP)

BLITZER: Do you have any reason to believe the intelligence was manipulated or shaded in advance of the war in order to generate support for the war?

ROBERTS: No, we don't have any evidence of that. I don't think Carl does either. I share his concern, but that's why I said, why don't we do our homework first? Why don't we take a look at the documentation of virtually everything that has been said about this. And if there is something egregious or if the hearings prove there is something egregious, I won't certainly rule out any further action.

By the way, that view is shared by the House of Representatives and their committee over there, their Subcommittee on Intelligence with Porter Goss being the chairman and Jane Harman being the ranking member. I am a little worried here that with all this feeding frenzy and all these questions, we're going right back to the problem what happened before 9/11. Everybody was complaining about risk aversion. Everybody was complaining about the fact we don't really connect the dots. And I don't know who would have ever come up with the idea that the terrorists would use airplanes as missiles.

And we said, "All right, get away from risk aversion. Really connect the dots." It's, you know, like the USS Cole. Had we ever really connected those dots with storm clouds here and lightning strikes here, maybe 18 American lives were saved.

Now we're beating up on the intelligence community. We have a lot of people with a tad bit of politics involved blaming the president for virtually every car bomb and every suicide bomber. I think this thing has got out of hand.

Let's do it on a workman-like basis, thoroughly review the documentation, continue to have hearings -- we'll have another hearing this week on WMD -- explore how that analytical product got in the hands of the policy advisers.

The big thing, Wolf, is, where are the weapons of mass destruction? We know that he had them. They are either dispersed, they're either hidden or they're offshore. And that really worries me, that should be the key question.

BLITZER: So you have no doubt, Senator Roberts, that they're there somewhere. They may be in Iraq; they may be elsewhere. But you have no doubt that the intelligence was absolutely solid, going into the war, that Iraq did have these thousands of liters of anthrax or mustard gas or other chemical or biological agents?

ROBERTS: I have no hesitation in my mind he had a weapons of mass destruction program. Whether he had it just before we went in to war, I can't tell you that. That was the judgment of the Clinton administration. That was the judgment of the French intelligence, of the British intelligence, the IAEA, and the U.N.

They have never told us what happened to the weapons of mass destruction. Until we find out, it seems to me that should be the crucial question.

You could make the argument, as used by the critics, that Saddam Hussein never really existed, simply because we can't find him. Now, that's a ridiculous argument to make, but let's find out where the weapons of mass destruction are. And in the doing of this, let's do it on a step-by-step, responsible basis, rather than a complete investigation, it seems to me, that is not merited at this particular time.

BLITZER: One of our viewers sent us an e-mail in the past hour, asking, are any of these captured Iraqis, these scientists, these political leaders, members of the Baath Party or the Republican Guard, are they talking to U.S. troops, to U.S. investigators, providing any useful information?

ROBERTS: Well, basically the top level or the deck-of-55 people are singing the same song, or singing the same party line, or saying the same thing, in regards to the weapons of mass destruction.

But we just had from I think British intelligence, as quoted by the L.A. Times, indicating that they had scientists unknown to the U.N., and they were going to reconstruct the weapons of mass destruction just as soon as the U.N. sanctions, say, were lifted.

It's people like that, at a lower level, that we really didn't know about, that if we can locate them and then we can interrogate them, we will find out what happened to the weapons of mass destruction.

We're only 80 days out, Wolf. I mean, it took 90 days for the IAEA to determine, after the first Gulf War, that Saddam Hussein did not have any nuclear capability. Then, at the end of six months, we said, woops, that he did. So, you know, let's don't rush to any conclusions.

This Intelligence Committee will review all -- will very carefully review all of the documentation that was given to the administration, and we will take a look at the relationship between our collection assets, the analytical product, and then what happened when the policymaker makes that advice. If there's something wrong, I will not rule out any further action. We could have an investigation. I don't think that will happen.

BLITZER: One of your predecessors, Senator Bob Graham of Florida, a Democrat, running for the Democratic presidential nomination right now, has already come to some very harsh conclusions. He was on this program last week.

ROBERTS: Yes, he has.

BLITZER: Later in the week, on CNN, he also said something very, very precise. I want you to listen to his conclusions so far on the intelligence leading up to the war.

(BEGIN VIDEO CLIP)

SEN. BOB GRAHAM (D), FLORIDA: I think there has been a pattern of manipulation by this administration, and it's not all just Iraq- related. It relates to the war on terror, where the fact that we essentially have abandoned the war on terror for the last 14 months has been withheld from the American people. (END VIDEO CLIP)

BLITZER: That's a very, very strong indictment, a strong charge. Is he right?

ROBERTS: It's also very, very wrong. I see intelligence reports every day. We have actually improved our situation in the war against terrorism. 41 percent less terrorist attacks this year, as compared to last year. Now, that doesn't take into account the bombing in Morocco, and also Saudi Arabia.

I don't know. Bob was chairman of the Intelligence Committee, he did a good job, he's a colleague, he's a good friend. You could raise the issue that, since he was chairman of the Intelligence Committee, he manipulated the intelligence. Now, that would be absolutely ridiculous.

So I think we ought to calm down here. We have nine presidential candidates all saying the same thing, that national security will be an issue. I know that it's a little early for politics, but there's a little tad bit of politics being played here. I think it's very, very counterproductive.

Let's do it again on a workman-like basis, get to the bottom of this, and find out where the weapons of mass destruction are. That's the crucial element in our national security posture, and the safety of the American people and the rest of the world.

BLITZER: Very briefly, Senator, because we're out of time, but Scott Speicher, the U.S. pilot who went down on the first day of the first Gulf War, from Kansas, you've shown a great deal of interest in his fate. What do you know right now? Is Scott Speicher dead or alive, still in Iraq somewhere?

ROBERTS: We don't know that. We think the probability still is that he may be alive. And as long as that may be there, why, we're going to persevere.

The same teams that are going in with the 1,400, we have what we call the "Speicher team," they're making all sorts of assessments. They are talking to every individual. By "assessments," I mean the initials that were carved in that cell, in the prison cell, called "MJM" -- it was named after his two kids and his wife Joanne.

We still think and hope that Scott may be alive, but we're not giving up until we determine his fate. And that's not only for Scott, it's for every person who wears the uniform who serves in the service.

And just ahead, the road map for Israeli-Palestinian peace. Are both sides prepared to follow the path? We'll hear directly from the Israeli deputy prime minister, Tomy Lapid, and the Palestinian foreign minister, Nabil Shaath.

And later, Senator and former first lady Hillary Rodham Clinton tells how she felt about the affair that led to her husband's impeachment. We'll preview her extraordinary new book that hits bookstores tomorrow.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: If all sides fulfill their obligation, I know that peace can finally come.

(END VIDEO CLIP)

BLITZER: President Bush in the Middle East earlier this week, encouraging Israeli Prime Minister Ariel Sharon and Palestinian Prime Minister Mahmoud Abbas to follow the road map to Middle East peace.

Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

Earlier today, just a little while ago in fact, I spoke with Israel's deputy prime minister and minister of justice, Tomy Lapid, about implementing that road map.

(BEGIN VIDEOTAPE)

BLITZER: Minister Lapid, thanks very much for joining us.

Let's get right to the news of the day, this latest incident involving an attack against four Israeli soldiers killed along the border between Gaza and Israel.

Is this effectively, as far as you're concerned, your government is concerned, the end of the road map toward peace?

TOMY LAPID, ISRAELI MINISTER OF JUSTICE: No, it isn't. It's terrible, it's horrible, but it was expected. The extremists, the fanatics are trying to destroy our effort, and they will not succeed, though it is very, very painful and it's not the end of it.

BLITZER: You believe the Palestinian Authority, the new prime minister, Mahmoud Abbas, can control these elements of the Palestinian community?

LAPID: We want to see whether he's trying to do it. The test is not whether he succeeds immediately. We don't expect him to succeed immediately. We expect him to do his utmost to succeed, and that's the test.

BLITZER: The road map calls on him to try to attempt 100 percent effort to end these kinds of attacks. So far what is your assessment of his efforts?

LAPID: We know that some efforts are being made, we think not enough, and certainly not enough to satisfy the needs of both sides long term. But we are willing to give him a chance, and I hope that he makes the best of it, though Arafat is doing everything he can to destroy the whole process.

BLITZER: When you say that, what specifically do you mean? Do you believe Yasser Arafat, for example, called for these latest attacks against Israeli troops?

LAPID: I don't know whether he specifically called for these attacks, but what we do know is that he is ridiculing the whole effort, that he is sending people in the streets to demonstrate against the effort, that he is weakening Abu Abbas whenever he can and wherever he can, and that he's playing a very negative role because he's envious and because he's angry and because he's suspicious and because he's a destructive person.

BLITZER: What can Israel, your government, do about that?

LAPID: Well, we have been asked by your government not to send Mr. Arafat abroad, so all we can do is negotiate with Abbas and cooperate with him and show signs of our willingness to go forward with our side of it, like freeing prisoners.

We have tried to stop the limits that we have set on the border, and the response was the killing of four soldiers.

BLITZER: Will Israel, your government, go forward this week or at least in the coming days with the dismantling of these 12 to 15, what the prime minister calls these illegal outposts, these settlements, very tiny ones, on the West Bank as promised?

LAPID: Yes, we will do as promised. We will proceed with that. But of course we expect the other side to do the same and proceed with their part of the commitment, and we have yet to see that.

BLITZER: What if some of those Jewish settlers at those outposts...

LAPID: Let me tell you...

BLITZER: Let me interrupt. What if they resist, what if they resist, perhaps even with gunfire? Are Israeli troops ready to go in and use force, if necessary, to remove those settlers in those outposts?

LAPID: They will not shoot at Israeli soldiers, no way. They may put on a passive resistance. They will never touch an Israeli soldier. They are Jewish patriots. They are -- I totally disagree with what they are doing and with their views, but certainly they will not harm the Jews, and particularly not soldiers or policemen.

But we have to go in, and we should dismantle these settlements anyhow, even without an agreement, because they are illegal, and Israel is a country of law and order.

BLITZER: The other day, the prime minister caused an uproar when he spoke of an Israeli occupation of the West Bank. I want you to look at precisely to what the prime minister said that caused such a stir.

(BEGIN VIDEO CLIP)

ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): What is happening is an occupation. To hold 3.5 million Palestinians under occupation, I believe that it is a terrible state, for Israel and for the Palestinians, and also for the Israeli economy.

(END VIDEO CLIP)

BLITZER: Does this represent a significant shift on the part of the prime minister, now openly speaking of an occupation?

LAPID: Well, he made a little correction. He said he meant occupation of a people, not occupation of a land.

But basically, this is a watershed in the political career of Airel Sharon. He accepted the idea that we have to withdraw from a great deal of the territories in order to have a peaceful settlement with the Palestinian state.

This is a major difference between now and what he said in the past. And we can only welcome him for recognizing that we are living now under different circumstances in different times. I certainly support him in that.

BLITZER: Tomy Lapid, the justice minister of Israel, thanks very much for joining us.

LAPID: Thank you very much.

(END VIDEOTAPE)

BLITZER: And joining us now live from Gaza is the Palestinian foreign minister, Nabil Shaath.

Minister Shaath, welcome back to LATE EDITION.

You just heard him say this is a watershed, the language used now by Prime Minister Sharon. Do you believe this is a new prime minister of Israel?

NABIL SHAATH, PALESTINIAN FOREIGN MINISTER: Well, Mr. Sharon has changed over time and has really been in different political parties. His career indicates that he can change. And I think anybody can change when he sees that his people and the people that share this holy land with him are really in trouble and there is a need to go forward and a real peaceful solution.

BLITZER: You heard -- you may have heard the interview I did in the past hour with the secretary of state, Colin Powell. He said the incident in Gaza earlier today involving the killing of these four Israeli soldiers, that this was an attack by Palestinians not only against Israel, but against your Palestinian Authority, especially an attack against Prime Minister Mahmoud Abbas.

What are you going to do about that?

SHAATH: Well, I think Mr. Abbas made it very clear to President Bush, and before him to Mr. Colin Powell, that after the almost total destruction of every infrastructure of our security forces, that what is available to us in the way of options is very limited to a real dialogue with all the Palestinians, helped by Israeli behavior, that will produce a change in the climate that will allow us to reach a total cease-fire.

Hoping that that will give us and Israel the opportunity to build up the necessary support for constant, real peace with security for the two peoples in the implementation of the road map.

We have no capability nor willingness to go through a civil war now, and I think it is very clear to both Mr. Sharon and to Mr. Bush.

BLITZER: The issue is, a cease-fire involving these groups: the Hamas, the Islamic Jihad, the al-Aqsa Martyrs Brigade. You sought -- Prime Minister Abbas sought such a cease-fire. The answer we got today, apparently, in these latest attacks.

Does that mean the effort to achieve a cease-fire has died?

SHAATH: No, I don't think so.

And in all fairness, one has to also recall the events of just 36 hours earlier, when, immediately after the Sharm el-Sheikh and the Aqaba conferences and summits, the Israeli army went into a village near Tulkarem and assassinated four Palestinians and did a lot of damage in that area immediately after Aqaba. One also ought to recall that, while Aqaba was going on, Israeli tractors and Israeli tanks were devastating the north of Gaza.

So, I mean, if we want to recall incidents, we have to look at the whole story and not only at the Palestinian incident. We need the two parties to take some risk in going ahead and restraining all efforts to continue that confrontation to move us back into a real opportunity for peace which, to me, looked like it was possible in Aqaba and Sharm el-Sheikh.

BLITZER: The leadership of the Hamas movement, including the spiritual leader of Hamas, say that you, your government, the Palestinian Authority of Prime Minister Abbas, simply made too many concessions at Aqaba to the Israeli government.

BLITZER: Listen to what the Sheik Ahmed Yassin said on Friday.

(BEGIN VIDEO CLIP)

SHEIK AHMED YASSIN, HAMAS LEADER (through translator): We have stopped the dialogue with the authority because of this bad position which ignored the right of refugees, forgot the prisoners, ignored Jerusalem and ignored the rest of our fateful causes.

(END VIDEO CLIP)

BLITZER: So, is that position -- is that position going to stop you from making the kinds of concessions the road map is demanding?

SHAATH: And I think Sheik Yassin and the whole Hamas movement really missed the point of the speeches made in Aqaba. The speeches made in Aqaba were not a final agreement between Israel and the Palestinian Authority. They were indicated in the road map. Namely, these were an opening that required the two parties to state very simply their dedication to ending the violent conflict between them and their acceptance of Mr. Bush's idea of a Palestinian state side by side with the state of Israel in peace and security. That was the whole exercise.

Obviously Mr. Abbas' statement was very clear, very clear-cut, and complied with the road map to the final letter. Whereas Mr. Sharon's statement was really not that clear-cut, was not that similar or equivalent to the statement of Mr. Abbas. And that is what created the confusion, that Mr. Abbas was willing to explain had the Hamas people were willing to meet with him immediately after coming from Sharm el-Sheikh and Aqaba.

BLITZER: One final question before I let you go, Minister Shaath. Yasser Arafat, the Palestinian Authority president, is he still controlling the shots?

SHAATH: Well, he remains the popularly elected president of the Palestinian people. And he really has missed participating in many a negotiating arena before. He was not in Taba, he was not in Madrid and so on.

But he has to be consulted. Prime Minister Abbas has kept his commitment to consult with President Arafat on matters of such great importance as the matter of solution of the Palestinian-Israeli problem. But President Arafat has delegated to him all the authority of conducting this negotiation on the ground. I don't think there is a real problem there.

BLITZER: The foreign minister of the Palestinian Authority, Nabil Shaath, once again joining us on LATE EDITION. Thanks to you.

Thanks, of course, earlier, to the Israeli deputy prime minister, Tomy Lapid. Good luck to both sides as they continue this search for peace.

Coming up next, we'll go to CNN Headquarters in Atlanta for a quick check of the hour's top stories. LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Just ahead, Senator and former First Lady Hillary Rodham Clinton's new bombshell of a book. Is it a prelude to a presidential run? We'll get some unique perspectives from some high- powered and powerful women when LATE EDITION returns.

(COMMERCIAL BREAK)

BLITZER: Remember, our LATE EDITION web question of the week is this: Is Martha Stewart being treated unfairly? You can still cast your vote. Go to our web address at cnn.com/lateedition. Stay tuned for the results later on this program.

Welcome back to LATE EDITION. I am Wolf Blitzer in Washington.

A fever-pitch buzz, especially here in Washington, about Hillary Rodham Clinton's new book which hits bookstore shelves tomorrow. The senator and the former first lady's memoirs entitled, "Living History," include some intimate accounts of her feelings about her husband's affair with Monica Lewinsky.

Joining us now to talk about the potential impact of Senator Clinton's new book are four special guests: in New York, Lisa Caputo. She was the press secretary for Hillary Clinton in the White House when she first took office.

In Atlanta, the former CNN executive vice president, Gail Evans. She's also the author of an important new book. It's entitled this, "She Wins, You Win: A Guide to Making Women More Powerful." An important read for all of us.

And here in Washington, Time magazine columnist and CNN's Capital Gang panelist, Margaret Carlson. She has a new book, as well, that's entitled "Anyone Can Grow Up: How George Bush and I Made It to the White House." That's also a good book.

And journalist Danielle Crittenden. She's the author of the book, "Amanda Bright," at home. We'll talk a little bit about that as well.

But let's get started with Lisa and talk about the bombshell, Hillary Clinton's book.

Lisa, why did she write this book and have to come out with all of these details about Monica Lewinsky and Bill Clinton at a time when virtually everyone was over it, had forgotten about it and she has brought it back to the forefront right now?

LISA CAPUTO, HILLARY CLINTON'S FORMER PRESS SECRETARY: Well, you know, Wolf, she really wanted to write this book, as practically all first ladies do, which are to write their memoirs. And this is an historical perspective, a look at her life starting with her childhood, going through the time when she met Bill Clinton, on through the White House years. She really felt a responsibility to history.

And I think anybody here on the panel would agree she couldn't write this book and not address how she felt during the Lewinsky situation. I think she'd be crucified if she didn't tell the American public how she felt during that very difficult period in her life. I mean, this is a book about both the good times and the bad times.

BLITZER: That's a fair point.

Danielle, you agree?

DANIELLE CRITTENDEN, AUTHOR: Well, I was just smiling at you when you say "all the details." In fact, I think we've gotten very few details, at least for an $8 million book. I think there is an $8 million that Hillary Clinton could write. And from the excerpts that we've seen this week, this isn't it.

BLITZER: Well, what else do you want her to tell you?

CRITTENDEN: Well, no, but I was struck by the way -- I mean, to me, I think, as a fiction writer, I very much identify with this book because she's got it as, you know, this powerful, accomplished character named Hillary Clinton, seemed to be the only woman in the country not to know what her husband was doing. That was the true and intimate details that we learned about her feelings with Monica Lewinsky. I think it's more about spin than it is about truth.

BLITZER: Well, Margaret and Lisa and Gail, stand by because I want to read an excerpt from the book that makes that specific point. Hillary, in August, this is months after we all learned the name Monica Lewinsky, he finally comes clean just before he is ready to testify, the president, and she reacts by writing this: "I could hardly breathe. Gulping for air, I started crying and yelling at him. What do you mean? What are you saying? Why did you lie to me? I was furious and getting more so by the second. He just stood there saying over and over again, I am sorry. I am so sorry. I was trying to protect you and Chelsea."

Was she the only person in the United States who didn't already know what happened?

MARGARET CARLSON, "TIME" MAGAZINE: Yes. In a word, yes. I mean, you had to know, because by that time Betty Currie had testified and other things.

But in that passage, you see Hillary doing what she needed to do. We all know Hillary Clinton is smart. But we sometimes wondered, is she human, because we did not see any human responses during that period because she kept everything inside. And by doing -- by gulping for air, she shows us that she had that human reaction.

The other part -- the other thing she did in the book was to make a very important point and set the record straight from her perspective, which is what did she know and when did she know it. To show that she wasn't complicit with the president during this period, she establishes that August 15th date as when she found out. So that now when she goes forward, she wasn't an enabler, she wasn't complicit.

BLITZER: But Margaret, a lot of people simply don't believe her, what she has written in this book.

Let me bring Gail Evans in, who knows a lot about this subject.

Gail, another quote from the book from that day: "I was dumbfounded, heartbroken and outraged that I had believed him at all. As a wife, I wanted to wring Bill's neck."

Monica Lewinsky was apparently, as all of us know, not the first woman whose name had surfaced in connection with reports of an affair with the president.

GAIL EVANS, AUTHOR: But, Wolf, a lot of this is about the infinite power of the human mind, you know, to live in denial. I mean, she was a wife. When you think about it, could any woman have believed her husband was going to put the presidency in the kind of jeopardy he did by doing something like that?

I think that -- I really believe that the 15th is probably the date in which she finally admitted to herself that this was true, because he told her. It doesn't shock me that she says that she didn't believe it, even though the rest of us knew it was true. I think a lot of us kept hoping, like her, that it wasn't true.

BLITZER: What about that? Let me let Lisa come back in.

Go ahead, Lisa.

CAPUTO: If I could add here, I had left the White House at the time, but I was in regular touch with the then first lady. And I can tell you, that is exactly the way it was.

It's exactly how I remember that time. She had no idea; Chelsea had no idea. I mean, clearly, the president, obviously, misled his wife and child.

But I want to raise an issue which I find fascinating in this whole discussion about this. I really would like to pose the question of whether we would be having this discussion if this were about a man. I don't know.

EVANS: Lisa's absolutely right. We would not be having this discussion if this was about a man. And, you know, I mean, just take when Dukakis ran for president. We did not have long discussions with him about his wife's problems. This is definitely -- would not have happened if she was a man.

BLITZER: Well, let -- yes, go ahead, Margaret. Go ahead and weigh in.

CARLSON: We are going to have this discussion when Bill Clinton's book comes out, so I do think there's a double standard, but maybe not about this issue.

The other point is that Hillary needed plausible deniability about when she found this out. And I think she actually has it, in part because the president is protected by the enormity of what he did. Yes, she knew he had had affairs, but would he do it in the White House with someone his daughter's age? BLITZER: Would he be that reckless?

CARLSON: Would he be that stupid?

BLITZER: Danielle, let me read something else that she writes in that brief segment over there. She writes this: "He now realized he would have to testify that there had been an inappropriate intimacy. He told me that what happened between them," referring to the president and Monica, "had been brief and sporadic."

Now, some are saying, even then the president was not telling her the truth, because it hadn't been brief. It had been going on for months, and not necessarily all that sporadic.

CRITTENDEN: Well, I don't think I want someone in this much denial now positioning themselves to run for president. If this is the case, if she is this naive -- I mean, I don't think it's a double standard. I think if she were a man, if she had faced serious legal issues that this first lady did throughout her tenure, we would be putting him through the grilling process.

BLITZER: That's a fair point, too. Let me...

CRITTENDEN: And I think what most of this book is amounting to, she couldn't take that advance and she couldn't write a book without addressing the issue.

CARLSON: She had to show a little ankle.

CRITTENDEN: So what she -- she had to -- thank you, Margaret, that's it perfectly. She had to come close, and then she set the record straight, so it seemed respectable. Now she wants to move on.

BLITZER: All right. What about that, do people want a president of the United States, Lisa, who is living in denial, if you will?

CAPUTO: Well, let's separate the issues, Wolf, because I think it's important. I mean, you're talking about a marriage here and you're -- the line is getting blurred between the relationship between a wife and her husband, and the president and the first lady, and whether or not this woman in this marriage is going to have a political career.

I would say, you have to keep the issues separate. I mean, what happened in their marriage is something between the two of them that she chose, in her way, to make public in this memoir.

Now, the question -- there's a separate question here, which was just raised, is, you know, is she positioning herself?

I think it's a fair question, but let's address it. I mean, she was very clear in the Time magazine article with Nancy Ginn (ph) that she is not running for president in 2004, and, in fact, then said she has no intention to run in 2008.

Now, everybody's jumping all over the "she has not intention, she left the door open." Let's parsing words. She has no intention to run in 2008.

BLITZER: Well, Gail, let's talk a little bit about keeping that marriage together. A lot of people will say she deserves an enormous amount of credit, despite what her husband did, keeping the marriage together for the sake of the family, including for the sake of Chelsea.

EVANS: Well, and also for the sake of the nation. I think that as awful as things may have been, they would have been a lot more unpleasant if the first lady had left the White House and we had potentially had a divorce or something like that.

I think that we really -- I mean, Lisa makes the right point, I think. We have to separate this. I mean, if you take the lives of many great men and we were to examine exactly what their lives were personally, it's very different from what they achieved and what they accomplished politically or intellectually. So, I think there's a big difference. And we're examining her life in a different way than we've ever examined any of the males that have done all of this. So I do think there's a real double standard here.

BLITZER: Go ahead, Margaret.

CARLSON: I agree with Lisa. Hats off to Hillary for keeping the marriage together. Any time that happens, it's a good thing.

But this is also a merger of political fortunes, and it works for the two of them to stay together, because Bill Clinton's legacy was not having Al Gore in the White House. If he has one, it will be having Hillary Clinton in the White House.

BLITZER: Let me read to you what the first lady -- what the then first lady said on the Today Show in January 1998, shortly after the Monica Lewinsky name surfaced. She said this:

"I do believe that this is a battle. This is the great story here, for anybody willing to find it and write about it and explain it, is this vast right-wing conspiracy that has been conspiring against my husband since the day he announced for president."

Now, in the latest excerpt, she writes this, she goes on and says: "For me, the Lewinsky imbroglio seemed like just another vicious scandal manufactured by political opponents."

Danielle, was this all the result of political opponents, this vast right-wing conspiracy ganging up unfairly on this couple?

CRITTENDEN: Well, for sure we know that's not true now at all. And I think what -- if there's a double standard here, it's always one set by the Clintons themselves, is that they would get into very dubious areas of legality in their personal lives, and then, when you went and probed it, they would stand back and say, how dare you probe my personal life?

And I suspect, as we go through this book, we're going to, you know, hear very little about the travel office, we're going to hear very little about -- I mean, I don't know what she says about the whole health reform.

But, you know, she was -- she would often take -- she was criticized for taking political power upon herself, non-elected power, during that whole health-care reform, and then, when got criticized, she stepped back and said, I'm just first lady.

So she's always been crossing the line.

BLITZER: All right. We're going to have a chance to read about all of that stuff in this, what, 800-page book. Unfortunately, we have to leave it right there.

Danielle, "Amanda Bright at Home," very briefly, what's that about?

CRITTENDEN: It's a novel about a high-powered career woman who becomes a stay-at-home mom.

BLITZER: I just wanted to clear up that.

(LAUGHTER)

BLITZER: Thanks very much, Danielle.

Margaret, good luck with your book.

Gail, I know your book's going to be a huge success.

EVANS: Thank you, Wolf.

BLITZER: They all are.

And, Lisa, you're going to be very busy in the coming days, talking about your former boss.

Thanks to all of you for joining us.

(CROSSTALK)

CAPUTO: I've got to write a book, Wolf, clearly.

(LAUGHTER)

BLITZER: I want you to write a book, and then we'll have you back, hopefully at that time as well.

CAPUTO: Thanks, Wolf.

BLITZER: Still ahead, the indictment of another powerful woman, Martha Stewart. How strong is the legal case against her? And an important ruling in the Laci Peterson murder case. We'll get insight on both those stories from two prominent attorneys.

But it's time to say goodbye to our international viewers. Thanks very much for watching.

For our domestic viewers, stay tuned, the next hour of LATE EDITION. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

Our legal panel will discuss Martha Stewart's indictment and Scott Peterson's murder trial in just a few moments. But first, let's check our top story, and for that, let's go over to the White House.

Secretary of State Colin Powell and the national security adviser, Condoleezza Rice, are strongly defending the administration's pre-war intelligence that justified the removal of Saddam Hussein's regime.

Chris Burns is standing by in the North Lawn at the White House. He's got the latest -- Chris.

BURNS: Yes, Wolf, hi. President Bush just arrived back from a quiet weekend in Camp David. However, he left up to his chief foreign policy advisers to do the talking today and actually wage a counterattack against critics in the wake of that Defense Intelligence Agency report that was leaked to the media earlier this week, talking about -- suggesting that there was not enough reliable information that there were weapons of mass destruction in Iraq.

Of course, it was a mixed report. There was other evidence in there that did talk about the possibility that these weapons could be produced.

In any case, that was seized on by the critics. Secretary of State Colin Powell coming back as saying that it's outrageous that these critics could talk about bogus information, that he himself did his homework.

(BEGIN VIDEO CLIP)

POWELL: And the presentation I gave on the 5th of February before the United Nations Security Council, I spent four whole days and nights at the CIA, going over all the intelligence in order to make sure that what I presented was going to be solid, credible, representing the views of the United States of America. And I stand behind that presentation.

(END VIDEO CLIP)

BURNS: Condoleezza Rice, national security adviser, talking about historical revisionism engaged by these critics, and saying that there was more than a decade of evidence for supporting the U.S. position before it went to war with Iraq.

And President Bush saying, himself, a few days ago that the truth will be revealed.

But that is the big question. There are a lot of critics inside and outside this country asking, "Where are the weapons?" -- Wolf.

BLITZER: All right, Chris Burns, thanks very much for that update.

Let's move on now to the Martha Stewart case. The domestic maven faces federal charges of conspiring to hide an alleged illegal stock trade made in 2001. Stewart says she's not guilty.

Joining us now to offer some insight into the game plan of both the prosecution and the defense team are two courtroom veterans: in Boston, the former federal prosecutor, Wendy Murphy. And in Los Angeles, Rikki Klieman of Court TV.

Thanks to both of you for joining us.

Rikki, how strong is this government case against Martha Stewart?

RIKKI KLIEMAN, COURT TV: Well, it sounds like it's strong, because what they're saying is that she lied. It's not so much the actions that she may have taken or may not have taken. But what they're angry about is that they believe that she lied to federal prosecutors, federal officials and to the public.

So, that's why the U.S. attorney's office is angry, and it's very easy to prove that someone didn't tell the truth.

BLITZER: It's pretty unusual, though, isn't it, to go after her in this way? Wendy, a lot of people say when -- one of the charges is when she defended herself and said she's not guilty of anything, that exact -- that the government is now accusing her of committing a crime by defending herself, supposedly trying to manipulate the market.

WENDY MURPHY, FORMER FEDERAL PROSECUTOR: You took the words right out of my mouth, Wolf. I mean, defendants who commit murder every day in this country lie to investigators and cover their tracks and make up false alibis, and they don't get prosecuted, in part because, although the Fifth Amendment doesn't protect or provide a right to lie, or the right to obstruct justice, we know that one of the things the Fifth Amendment does protect is the right to insulate yourself from government coercion, the government using you, in a sense, as a witness against yourself.

And look, there's no question that, on some level, what she did was wrong and is a crime, and she's not above the law, so maybe she should be prosecuted. But there is a larger moral question, which is, Martha being used because the feds get a lot of bang for their buck when they go after a celebrity?

You know, if they want to send a message, you use a celebrity, because, in our voyeuristic culture, we're watching what happens to Martha. And in a sense we're learning, as well, that perhaps the feds are getting tough on these corporate scoundrels. Maybe that will make us invest more, you know, perhaps spark the economy a little bit.

I mean, frankly, I'm thinking that it might have the opposite effect. We're feeling a bit cynical already about this prosecution, that it is selective, that she was targeted for reasons that really don't seem fair. And even if it's a technically correct prosecution, if it doesn't sit well with the public, we're going to get the wrong message, and it's not going to help the economy.

BLITZER: And, you know, Rikki, a lot of our viewers feel precisely that way, that a double standard is now under way because this is a powerful woman at the center of this investigation.

Look at our web question results. Remember, this is not a scientific poll. But, is Martha Stewart being treated unfairly? 68 percent of those who voted on our cnn.com website say yes. 32 percent say no.

Is there a double standard here, Rikki?

KLIEMAN: There may be a double standard, but I have a lot of respect for this particular prosecutor. He has an excellent reputation. He is known as someone who's fundamentally fair.

One of the problems in this case for both side is this: You have two very good defense lawyers here, in Bob Morvillo (ph) and in Jack Tygue (ph). You have a strong prosecutor in Mr. Comey.

Apparently they were trying to work out a deal. The deal did not work out. It was up to the very last second, it sounds like, from the reports that I've read in the papers, that it looked like it might have happened, and then it looked like the client decided that she would not plead guilty if there was any possibility of jail time. Then, everything broke loose.

So, in the end, maybe Martha Stewart is right. Maybe Martha Stewart, before she knew about your poll, finds out and says, look, I'm not doing what they say they want me to do, I'm not going to say what they want me to say, I'm going to take my chances in the courthouse. That's a high-risk move, but she may prove to be right.

BLITZER: And, on that specific point, Wendy, shortly after the allegation was initially made, she came out and said this, in a statement, in a personal statement, June 12, 2002: "I had no improper information. My transaction was entirely lawful." Actually, she was simply defending herself. But the government now says she tried to manipulate the market by doing that.

Have you ever heard of a novel interpretation of the law like that?

MURPHY: You know, it's an interesting point. I mean, when you lie to the public, it's technically not a crime, but you sure can get the feds angry when you use your celebrity to gain a strategic advantage. I mean, we're watching, to some extent, that strategy play out in the Scott Peterson case, using the media, using the public, you know, trying to gain either strategic advantage in what might be a future prosecution or a strategic advantage with regard to your stock, and, you know, your business position.

You know, it's not against the law to do what she did, but if you're trying to build a relationship with the prosecution, trying to make nice with them, so that they won't go after you, that's exactly the wrong thing to do, and it's probably part of why she's being prosecuted.

BLITZER: Let's listen to what the prosecutor, the U.S. Attorney for the Southern District of New York, James Comey, said in announcing this indictment against Martha Stewart.

(BEGIN VIDEO CLIP)

JAMES COMEY, U.S. ATTORNEY: This criminal case is about lying. Lying to the FBI, lying to the SEC, and lying to investors. That is conduct that will not be tolerated by anyone. Martha Stewart is being prosecuted not because of who she is, but because of what she did.

(END VIDEO CLIP)

BLITZER: Wendy, you believe him?

MURPHY: Well, you know, it's going to be a very interesting case, because, if I were her attorney, the first thing I'd be doing is gathering up information about the Ken Lays of the world and all the other CEOs who caused huge, huge financial crises to happen, and lots of people lost so much money. I'd be looking for evidence as to what they did. Did they lie or tell the truth? Were they asked questions, or not? If they did lie, you know, what's with this moral high ground from the feds?

Are Martha's lies somehow worse than Ken Lay's lies? What did Ken Lay say? And all the Ken Lays that are out there are now going to be under very, very strong scrutiny by her defense team, by the public that wants to know whether this is a selective prosecution. And she is entitled to that.

BLITZER: Rikki, is that a fair argument her defense lawyers might make?

KLIEMAN: I think it's a fair argument. And there is an old saying, Wolf, that we all know well from the criminal defense side, which is that "Nobody talks, everybody walks."

Here you have a woman who has talked, only she didn't say what they expected or wanted her to say. And that's always that little thing, it's called 1001. 1001 is the number code for making a false statement to a federal official. And when they want to get you, they are going to take out that 1001.

BLITZER: Let's wrap up this segment on Martha Stewart by reading what she said. In a full-page ad she put out this past week in USA Today, she said in an open letter to her friends and supporters, "I am confident I will be exonerated of these baseless charges. But a trial, unfortunately, won't take place for months. I want to thank you for your extraordinary support during the past year. I appreciate it more than you will ever know."

All right, let's move on and talk a little bit about another high-profile legal issue this past week, the latest developments in the Scott Peterson trial out in Modesto, California.

Wendy, we heard the judge specifically say he is not going to release the autopsy report, despite the prosecution reversing itself and saying "Go ahead and release it. We don't care."

What do you make of that decision by the judge?

MURPHY: You know, Wolf, it was a reversal. The prosecution simply wanted the whole truth out. And the prosecutor was clearly furious that defense-favorable leaks, wherever they came from, defense-favorable leaks were misleading the public into believing that there was something in the autopsy records that simply isn't true, which is evidence of some kind of cult killing.

You know, it's also important to know that Laci's parents -- Laci's family joined with that prosecution effort. And that was very difficult for them. I mean, they said, "We have a right of privacy at stake in these autopsy records. And we want to give that up too, because we don't like these leaks of information, this misleading nugget here and there, that's really doing a disservice to the integrity of our family, to the integrity of the justice system." And so they were willing to say, "I'd rather hear the gruesome details, as painful as that might be, than let this shenanigans continue."

It's unfortunate. I wish the judge had allowed full disclosure of the autopsy, if for no other reason than to send a message to the source of the leaks they better not try anything like that again or there will be similar repercussions. And that would undermine the fair-trial rights of the defense. And so if they are behind this, you know, this might have been exactly the wrong move, especially with a tough judge like Judge Girolami.

BLITZER: And Rikki, we saw Scott Peterson in court on Friday wiping away some tears from his eyes, showing emotion as this whole issue of the autopsy report was discussed.

Is that going to have an impact to see him reacting like that, as opposed to the sort of stone face we had come used to?

KLIEMAN: Well, I think that always a defendant's reactions have some kind of reaction from the public. It becomes one versus the other onto another, and it builds upon itself.

We have seen Scott Peterson, since the time of Laci Peterson's disappearance, and ultimately now we know her murder and the murder of her newborn child, being someone who looked callous, who looked absolutely removed, who looked remorseless. It was the first time, I think, that we have seen him show emotion in a very appropriate way. And of course, that does help.

Now, is that emotion real? It appeared, I think, generally, to be real. What does that mean? Ultimately, you've got Mark Geragos, who certainly knows how to work with the media, certainly knows how to manipulate the media. Is he also using his client to help manipulate the media for his client? Perhaps. But I would say from watching that tear roll down his face, for whatever reasons it came from, it looked real to me.

MURPHY: Oh, you know, if I could just jump in, Wolf? It's one thing to say it looked real and perhaps it was, I don't know. But we have to talk about the fact that it came out while the judge was saying something like, you know, "Will you be using black ink or blue ink on your document?" I mean, it was really an absurd moment when it came out. There was absolutely nothing being said about the body parts or the people involved.

So I think it's fair to infer that that was a lot of drama there. And I have no doubt that Mark Geragos is smart enough, as he has been playing the media and playing the public, that he whispered in the ear of his client at some point and said you've got to start doing something that suggests you're sad here because you're not doing well.

KLIEMAN: Well, and it may be an inappropriate moment, but we also have to remember, Wendy, he's scared. He's really scared. So being scared...

MURPHY: Well, he should be.

KLIEMAN: Yes, he should be. And certainly, being scared can bring out emotion at an appropriate time or an inappropriate time.

But I agree with you, Mark Geragos is no fool. Mark Geragos is talking to him to try to bring out some humanity in him. It's also the fact that Mark Geragos was able to persuade this judge to keep that autopsy report secret, at least for another month, which is a big surprise, I think, to most of us, because it really would have been released in almost any other case.

But Geragos has obviously persuaded the judge that there is a defense investigation that releasing the autopsy report might harm it. But that's the only possible reason that the judge could've come to that conclusion.

MURPHY: I totally -- I disagree with you, Rikki. I think the inference I draw is that this judge is deeply concerned about Scott Peterson's fair-trial rights, which is fine.

And so, I assume -- and I think it's a fair inference -- that he didn't let that autopsy out because he knows what's in there is very damning to the defense.

I mean, look, if that autopsy showed anything that suggests Scott Peterson's innocence, the whole thing would have been leaked, number one. Number two, Mark Geragos never would have opposed this new effort to let it out. I think we should assume what we're going to hear starting on July 16th will be a very, very strong prosecution case, in part because of what's in the autopsy.

KLIEMAN: I don't doubt that. I don't doubt that it will be a strong prosecution case. But nonetheless, you do have a judge who's going to err on the side of caution because we are in a death penalty case.

So if you can give the defense a benefit overruling for whatever reason, that only lasts a month or six weeks, why not do it?

MURPHY: I agree. I agree.

BLITZER: All right. On that note of agreement, we're going to have to end it right there. Wendy Murphy, Rikki Kleiman, excellent discussion on two important legal issues that we have been following. We'll have you back. Thanks to both of you.

MURPHY: Thank you.

KLIEMAN: Thank you.

BLITZER: And just ahead, turmoil at the Times, the New York Times, that is. Can the paper of record reestablish its credibility? We'll talk with Howard Kurtz about what's ahead for the old gray lady.

And Bruce Morton's essay.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: The new rules will almost certainly accelerate a trend toward more of the same news more of the time.

(END VIDEO CLIP)

BLITZER: Will new media rules mean less news you can use? Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Let's take a quick look at what's on the cover of this week's major news magazines, as we do every week.

Look at this: Time magazine has Hillary Clinton's own words about the events that impeached a president, her intentions for higher office and much more.

And on the cover of U.S. News and World Report, the truth about weight loss. What works, what doesn't.

More bloodletting this week at the New York Times. Journalistic scandals have forced the two top editors at the newspaper, Howell Raines and Gerald Boyd, out of their positions.

Joining us now to talk about what's ahead at the nation's most influential newspaper, arguably, at least until recently, is Howard Kurtz of The Washington Post. As you know, he's also the host of CNN's Reliable Sources, which airs each Sunday, 11:30 a.m. Eastern, just before LATE EDITION.

Howie, how much damage has been done to the New York Times?

HOWARD KURTZ, HOST, RELIABLE SOURCES: A lot, in my view. And a lot of it has been done internally. It's just remarkable, Wolf, what's happened at an institution where anointing a new editor is kind of like a papal succession, for the two editors to be hustled out of there -- and this was not entirely voluntarily, my sources say -- because many, dozens and dozens of reporters in the newsroom made clear that they didn't like the management style, particularly, of Howell Raines. That kind of eclipsed that whole Jayson Blair fabrication scandal. I've never seen anything like it.

And so, outsiders, of course, are wondering, you know, should we be more wary of what we read in the newspapers?

BLITZER: We hear a lot about his management style, Howell Raines. A lot of editors are mean and nasty and ugly, but what was wrong with his management style?

KURTZ: Well, it is certainly true that part of what editors do is to knock heads. I've known Howell for more than a decade. He has always been tough and aggressive. But since he became executive editor, he concentrated power, real authority, in so few people, just a tiny circle, that very senior editors and very experienced correspondents felt excluded. They felt insignificant. They felt dissed, to use a modern term. A lot of them -- a number of them left the paper.

And so, when it came to the hour of crisis, because, after all, Howell Raines was deceived by Jayson Blair, just like everybody else in the paper, but when he needed support, when he needed to show that he could manage the newspaper through this crisis, that support wasn't there.

He was like a politician without a base because there had been so much resentment built up over his 20-month tenure about the way, the kind of imperious way, that he ran that newsroom.

BLITZER: They brought -- Sulzberger brought back Joe Lelyveld, the former editor, and now take charge, at least for the time being. What does he need to do right away to reassure his readers?

KURTZ: I think Joe Lelyveld, just by showing up, has reassured not only readers but people at the New York Times, who felt -- who just agonized through a very difficult period.

But everyone knows that Lelyveld is there just for a couple of months, and Arthur Sulzberger has now got to pick a new editor. Howell Raines was his man, his appointment. He stood up at a staff meeting and said he would not accept Howell Raines' resignation, changing his mind only after it became clear, through Arthur Sulzberger, that Raines had so little support and had roiled the newsroom with his management style.

So, really, the question is, who's going to be the next editor of the New York Times? Is he going to have a more inclusive style -- not that editors are going to be warm and cuddly, that's not what they do. And can that person, along with everybody else at what is a great newspaper, help restore the credibility that's been tarnished?

And frankly, Wolf, all of us are tarnished in this business when something like this happens, because people feel they make it up, they cut corners, they plagiarize. Very, very few people do that. But when it happens, boy, it gets a lot of coverage.

BLITZER: And everybody seems to think, if this could happen at the New York Times, it could certainly happen at my hometown newspaper, lesser newspapers out there.

KURTZ: And there have been scandals at regional papers and big magazines. No news organization is immune from this. The question is, how do you handle it?

I think what really angered a lot of people at the Times and people who follow the Times is that yes, when this was first reported by me and others about Jayson Blair, they came out with a very detailed examination of the 36 stories that he basically had fabricated, made up or plagiarized. But they didn't take responsibility. Top management never said, "Boy, we really screwed up here." And that is what kept the storm of criticism going. That's ultimately why the two top guys are out.

This has never happened before at the New York Times. I hope it never happens again.

BLITZER: And is there another shoe that's about to fall at the New York Times, or, let us hope, this is it?

KURTZ: Well, there are a lot of rumors about other people being looked at, because the Times has kind of opened the door to complaints about other reporters, which led, in part, to Rick Bragg having to resign a couple weeks ago -- questions about his extensive use of a stringer.

I'm very careful not to drag anybody else into this until we have hard evidence. So I'm not going to get into rumors. Perhaps this is it. Perhaps there will be some continued backlash.

But I think Joe Lelyveld and ultimately the new Howell Raines, the new editor of the New York Times, has got a lot of repair work to do, both internally in terms of a kind of a wounded staff, and in the public arena where the Times has been through a rough month.

BLITZER: Howard Kurtz, you broke this story. You were doing some excellent reporting on it. Thanks very much. And congratulations, as well. Howard Kurtz just got married.

Time now for Bruce Morton's essay on the news, this (ph) way.

(BEGIN VIDEOTAPE)

MORTON (voice-over): Washington reporters and news executives put on some big, splashy dinners every year. The Radio TV Correspondents Association (UNINTELLIGIBLE) a few days ago, had more than 2,000 attendees.

MICHAEL POWELL, FCC CHAIRMAN: Those commissioners voting in favor of the item, signify by saying "aye."

MORTON: But also last week, the Federal Communications Commission revised its rules to make it easier for one company to own more TV stations, newspaper and TV in the same city and so on.

That led The Washington Post to joke pessimists were saying at next year's Radio TV dinner there would only be two people, the president and media mogul Rupert Murdoch.

That's an exaggeration, of course, but the new rules will almost certainly accelerate a trend toward more of the same news more of the time.

Broadcast networks, to take one example, don't just feed their affiliates Peter Jennings or Dan Rather, they also feed budgets and individual stories which the affiliates can use in their local newscasts. And in recent years, three networks -- ABC, CBS and FOX -- have agreed to pool a lot of those feeds.

And there's a service now which will do a station's weather. It would look local. The local anchor is saying, "Now here is Fred with the weather." But in fact, Fred may be 500 miles away. There's also an anchor, not local, to read national news, and the service is planning a Washington bureau.

It may not matter. The weather guy reads the same maps wherever he's standing. But again, it's more of the same news all the time.

In the middle of the last century, a well-respected columnist named Walter Lippman wrote that, "With competition among providers of news, the truth would emerge." But with less competition, that's less likely, especially if hard-to-get investigative stories are less likely if bureau A and bureau B are running a lot of the same stuff instead of trying to beat each other's socks off.

With fewer and fewer owners, there will be more and more pressure, not to excel, not to compete, but to make more money than the giant next door.

Eventually, maybe we all will work for the same employer, a company called, say, "Only, Incorporated." No competition, no worries about losing a top reporter to the gang across the street. And maybe the only two people at those big dinners will be the president and Mr. Murdoch, or the president and the Disney mouse.

Mr. Bush, whose idea of fun is not spending ago lot of time with crowds of nosy reporters, might like that just fine. And the rest of us, the consumers of news, we'd get used to knowing less. We'd have to.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thanks very much, Bruce.

Up next, the Bush administration insists Iraq's weapons of mass destruction will indeed turn up. Is our Final Round panel convinced? We'll debate that and more, no punches pulled.

LATE EDITION's Final Round, right after the hour's headlines.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Welcome to our LATE EDITION Final Round. Joining me, Donna Brazile, the Democratic strategist, Peter Beinart of the New Republic, Jonah Goldberg of the National Review Online and Robert George of the New York Post.

The Bush administration is coming out swinging against the mounting uproar about the failure so far to find weapons of mass destruction in Iraq and questions about whether it manipulated intelligence.

Today the national security adviser, Dr. Condoleezza Rice, said anyone doubting that Iraq did and still does have dangerous weapons is embracing a very unlikely scenario.

(BEGIN VIDEO CLIP)

RICE: You have to believe somehow that Saddam Hussein was willing, for 12 years, defying the international community, staying under sanctions, never answering questions satisfactorily, that he just did that kind of for the heck of it.

GEORGE STEPHANOPOULOS, ABC'S THIS WEEK: So you may be quite right...

RICE: He was clearly -- he was clearly concealing a program.

(END VIDEO CLIP)

BLITZER: Robert, are you convinced the administration was right on, as far as the pre-war intelligence?

ROBERT GEORGE, NEW YORK POST: I'm not sure. I'm not sure. And in fact, I'm not even sure if the administration is completely sure on the accurate -- on the validity of the intelligence. I think one thing that, I mean, that is clear that the administration certainly should be more concerned -- they should be concerned about unfair accusations about cooking intelligence. But they should also be concerned about legitimate criticism about, where are these weapons of mass destruction? If Saddam did actually have them, have they been spirited away during the war, which creates a whole host of other issues.

The other thing that there is a fair amount of legitimate criticism for is that the main weapon of mass destruction that the administration was seriously pushing was the fact that Saddam either had nuclear weapons or was close to actually developing them. And that seems to be the least believable right now.

BLITZER: What about that, Peter?

PETER BEINART, NEW REPUBLIC: I think Robert is absolutely right. I mean, I think the really larger story is that weapons of mass destruction is a bogus category. We do -- there is not a good reason for the United States to invade countries because they have biological or chemical weapons programs unless we know they are going to give them to terrorists. And there was no really convincing evidence on that.

And I think they probably did have a biological and chemical weapons program. But the nuclear stuff, which was really the real threat -- there were other justifications for war, for the fate of the Iraqi people, that's a different argument. But on national security grounds, it was only the nuclear one. And on the nuclear one, we know they were dishonest, and we know that was the one that mattered.

BLITZER: Well, on that issue, that's a strong charge. Do you know the Bush administration was dishonest when it came to the threat from Iraq's potential nuclear program?

JONAH GOLDBERG, NATIONAL REVIEW ONLINE: Well, the problem is there is a huge fog out there. There seem to be two different charges. One is that the Bush administration lied and made up all of this, which is flatly idiotic and absurd.

BEINART: Well, we know that the documents were forged on the uranium, though. I mean, there's no debate about that.

GOLDBERG: That's fine, that's fine. What Peter is going after is a different argument, which is that things were spun, things were -- there was some deception going on, that there was some hype going on.

But you hear a lot of people saying that the Bush administration made all this up, which means the Clinton administration made a lot up, it means the U.N. inspectors made a lot up. That doesn't fly.

The question about whether or not the data was cooked is one of the things that has to be investigated, and we'll find out.

BLITZER: What about that? Wrap it up. DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, quite frankly, I think we know that he possessed them. We know he used them. But unless we find them, I think the United States has a credibility problem.

BLITZER: That's going to be a problem for some time, presumably.

Meanwhile, at the historic Middle East summit this week, the president managed to secure promises from both the Israeli prime minister and the Palestinian prime minister to work their best -- to try their best to stop the violence on both sides and follow the so- called road map toward peace.

Today, Secretary of State Colin Powell told me the United States is confident the new Palestinian leadership will help move the process forward.

(BEGIN VIDEO CLIP)

POWELL: We are investing in Prime Minister Abbas. We believe that he is a leader committed to peace and is not giving those kind of signals to Hamas and the others. In fact, he has elected to take them on.

(END VIDEO CLIP)

BLITZER: Peter, is the administration right to have this confidence in Mahmoud Abbas?

BEINART: I'm afraid not. I mean, I think he is a good guy, but I think there are two big problems here. Remember, last year, the administration was saying the key to peace was a democratic Palestine.

Mahmoud Abbas is not a democratically elected leader. In fact, he has very little popular support, much less than either Yasser Arafat or Hamas. He is considered to be a U.S. stooge. And we did put him in power, even though he is a much better guy than Arafat.

Second of all, they want him to crack down on the West Bank, but they don't have a security service in the West Bank. They only have one in Gaza. And Israel doesn't want them to reconstitute one. So I don't see how they are going to destroy Hamas in the West Bank.

BLITZER: So what, this is all wishful thinking?

BRAZILE: Well, he needs time, and he also needs some deliverables. And Peter is right, unless he can put together an infrastructure in the West Bank and other places to crack down, then I think he's being made out to be a puppet of this administration.

BLITZER: Jonah?

GOLDBERG: Yes, I think that's all right. I don't think the administration -- I don't think it's fair to say the administration has confidence in Abbas. I think it has -- it's gambling on Abbas, in the same way that one is making the best of his hand, hoping to pull an inside straight. It doesn't mean you know you're going to do it. They're just -- they're taking a bet on this guy, and then he's just the best hand the U.S. has right now in this area.

BLITZER: It doesn't look very promising, does it?

GEORGE: No, unfortunately, I mean, when you've got this attack yesterday, and, you know, not one, not two, but three different organizations saying, oh, we did it, we did it, we did it, it really just undercuts whether Abbas has any power at all.

BLITZER: All right. We're going to take a quick break. We have much more coming up, including this: two powerful women dominating at least a lot of the news this week. Our panel weighs in on Hillary and Martha.

The Final Round will be right back.

(COMMERCIAL BREAK)

BLITZER: Bad news this week for the nation's domestic maven, Martha Stewart. She was indicted on federal charges of conspiring to obstruct an investigation into her stock sales. She pleaded not guilty, and her lawyers are suggesting prosecutors targeted her because she's a successful woman in a male-dominated business.

Donna, is Martha Stewart a crook or a victim?

BRAZILE: Well, I don't think she's either. I develop a soft spot for the domestic diva because I believe that she's being made out as a poster child for corporate misbehavior.

I think Martha should cook up a humble pie serve it with some whipped cream and dish it out to those prosecutors.

BLITZER: That sounds like good advice.

GOLDBERG: Donna thinks that she's neither. I think she's probably both. I think she's both a crook and victim in this. I do think it's probably overkill.

I don't think it's because she's a woman. I think it's because a lot of people think she's an annoying woman, which is an important distinction.

And she kind of reminds me of Glenn Close from Dangerous Liaisons. She creates this sort of aura of authoritarianism and culture, and then the second she's got a weakness, people go after her.

BLITZER: It seems sort of unfair to go after her on this issue of obstruction of justice when the original crime, they couldn't prove insider trading.

BEINART: Yes, that's true. And I think that, you know, probably anyone who you make an example of, you are probably going to mistreat in some way. But then the argument is, it still worth making an example of someone, because then it deters a lot of other people from doing it. And there's no question that a culture of impunity grew up on Wall Street in the 1990s and that the feds have to make sure that it stops. And I think there's a case for doing that.

GEORGE: If anything, I think she's more -- she's guilty more of the kind of classic baby boomer, an inside achroneism (ph) than anything else. The fact that she's annoying and has become this particular kind of an icon, I think is, I think the media does want to pile on her and bring her down a peg, in much the same way -- we were talking about this earlier -- in much the same way they were happy to bring down like a Bill Bennett. Anybody that looks kind of priggish seems to be fair game.

BLITZER: The hot word, (UNINTELLIGIBLE). We'll get into that another occasion.

From Martha to Hillary, a frenzies anticipation about New York Democratic Senator and former First Lady Hillary Rodham Clinton's new book, "Living History." That's out in bookstores tomorrow.

Some details already have been made public. She recounts how she discovered the truth about her husband's affair with Monica Lewinsky, saying, and I'm quoting now, "I was dumbfounded, heartbroken and outraged that I had believed him at all. As a wife, I wanted to wring Bill's neck."

Jonah, is this a prelude to a presidential run at 2008?

GOLDBERG: I think it probably is. We don't know for sure. It's certainly a major political campaign-like event, and it's being run like that.

These details that have been released, look, flatly are absurd and not believable and are contradicted by Blumenthal's book, by a reporter for The Washington Post. And they're the only ones that come out, and already, they're not believable.

Basically, what I think is going on is that this is a big game. They leaked the only thing anyone cares about, because I think it's going to be a profoundly boring book. And it's precisely the sort of thing that gets people on the right -- all my friends, myself included -- to scream nasty things about Hillary. Then she gets to play the victim, and that's the only role where she's at all compelling. And it's just a big game, and I don't want to play anymore.

BLITZER: Do you want to play this game?

BRAZILE: Well, first of all, I don't think she's going to run for president. She has one of the best jobs in the country, that being a senator from New York, and she's done a great job so far. Right, Robert? Absolutely.

(LAUGHTER)

BLITZER: He's one of her constituents.

BRAZILE: I think it takes a village to promote this book...

(LAUGHTER)

... and this book is being highly promoted by...

GOLDBERG: Took a village to write it.

BRAZILE: ... all sorts of people.

No, I think she wrote a lot of it herself, because she's speaking in her personal voice. It's a wonderful story.

BLITZER: In the interview, Robert, with Barbara Walters that will air tonight, she says categorically she's not running in 2004. But when asked about 2008 in the Time magazine interview, she says, "I have no intention of running in 2008."

A caveat?

GEORGE: Yes, a caveat. We know what that's about. I think she probably will run in 2008. I don't think she's going to win, but that's another story.

As Jonah said, this is -- what this does is, it puts her stuff all out there. So when more questions come up, if and when she does run in 2008, she can say, "Look, read it in my book. I've answered all those questions."

BLITZER: The charge against her I've heard repeatedly: She's doing all this, she's reviving Monica, bringing it all out right now at a time when everybody had forgotten about it, for the $8 million.

BEINART: Yes, that's probably true. And also because she wants to get it out of the way before the presidential campaign.

I actually think she's a kind of an interesting presidential campaign, and here's why. I think a Democratic presidential candidate who's going to win either has to have a longstanding hawkish record on national security or no record on national security.

Most Democrats have a fairly dovish record. You can pinpoint votes from the '90s and '80s and kill them with it in a post-9/11 era. Hillary, because she has no history on national security, because she wasn't elected, could potentially reinvent herself, if she's trying to -- she's on the Armed Services Committee -- reinvent herself in a hawkish direction, and make her a stronger candidate than some of the people who are out here now.

BLITZER: We'll soon find out. Time flies.

GEORGE: But she may have problems with her husband, though. Yes, he may cause some issues if she wants to run for president.

BLITZER: Well, that's another matter. She had some troubles with him, too, as we all know.

We're going to take a quick break. Much more of our Final Round coming up, our Lightning Round. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now for our Lightning Round.

The Justice Department is banning an annual gay pride event over at the Justice Department, a controversial decision. Let's get some sense what it might mean.

What is the message being sent out there, Peter?

BEINART: Look, it couldn't be more obvious. The message is that John Ashcroft and the Republican Party in general, not all Republicans, the general view in the Republican Party is that gay Americans do not deserve equal rights.

And that will continue to be the mainstream position of the Republican Party until conservatives of conscience make as big a stink about it as they did about what Trent Lott said, and I'm waiting.

BLITZER: The deputy attorney general, as you know, was criticized for attending the same event last year, by some conservative groups.

GOLDBERG: Yes, no, I mean, I think Peter is being a little harsh on the Republican Party, even from his perspective. The amount of debate going on about the role of gays in society is actually very vibrant in the Republican Party right now. And as all good parties do, they're debating and hashing out these issues.

But I think he's right. You know, who is shocked that John Ashcroft is not psyched about a gay pride month at the Justice Department? It's not a huge news story.

BLITZER: Donna.

BRAZILE: Well, the ironic thing is that there are gay pride marches being held right now on Pennsylvania Avenue across the street. So, if he's listening, go out and have some pride.

(LAUGHTER)

But the sad truth is that bigotry is alive and well at the Department of Justice, and I think the president needs to send a message, a loud and clear message, that bigotry has no place in America.

GEORGE: I think -- look, obviously the administration and the Justice Department can recognize whatever they want. I think the only problem with this is, this would have made a lot more sense if, when they came in two years ago, if they said, you know, we're not going to recognize that. I think the fact that they flipflopped makes it look like a -- you know, a pre-election year political decision, which is probably not the wisest thing to do.

BLITZER: Speaking about elections and political decisions, let's move on. Is political office in national security adviser Condoleezza Rice's future?

Listen to her response today when she was asked whether she's planning a run for governor of California in 2006.

(BEGIN VIDEO CLIP)

RICE: I think I've got my hands full with national security adviser right now.

TIM RUSSERT, NBC'S MEET THE PRESS: Is that yes or no?

RICE: Got my hands full as national security adviser.

(END VIDEO CLIP)

BLITZER: Donna, how good of a candidate would she be -- let's say she ran against Arnold Schwarzenegger for governor of California in 2006?

BRAZILE: Well, I think she'll make a interesting candidate, clearly will be dubbed the muscular primary. Both of them are avid body-builders.

But Condi has indicated that she would like to be NFL commissioner when she leaves office, and I vote for her, NFL commissioner in 2005.

BLITZER: You vote for Condi too?

GOLDBERG: Against Arnold Schwarzenegger? I just don't know.

(LAUGHTER)

But look, I mean, it's a sign of how much the Republican Party has changed, that, you know, this morning the two leading spokesmen out there were Colin Powell and Condi Rice, and I think it's a great sign.

BLITZER: What do you think?

BEINART: There is a part of me that really hopes, actually, the Republicans do elect a governor of California, because I think it'll cause no end of problems for the party.

If they are going to elect someone, be it Schwarzenegger or Condi Rice, they're going to have to be pro-choice, pro-gay rights, pro- immigration, probably pro-affirmative action, very pro-environment. That will cause a lot of problems for the national Republican Party, and it'll make a very interesting debate.

BLITZER: And Arnold Schwarzenegger is all of those?

BEINART: Whoever -- to win, a Republican candidate will have to be, in California.

GEORGE: Well, given -- you're probably right. But given Proposition 209, I don't know if they have to be pro-affirmative action.

I think Condoleezza Rice would be a great candidate. The fact that they might have a real contested primary between two giants, in a sense, would be good for the Republican Party.

By the way, though, there is actually a possibility that a Republican could be elected before 2006, because there is a recall effort going on in California to kick Gray Davis out.

BLITZER: Well, we're not going to get into the recall right now. We'll leave that for another occasion.

GEORGE: Just a little bit of information for the folks at home.

BRAZILE: Gray Davis will survive this recall, Robert.

BLITZER: We'll see what happens in 2004, 2006. We've got a lot of time on this show.

That's your LATE EDITION for Sunday, June 8.

Coming up next, "IN THE MONEY," with the story of how some companies are using a loophole in immigration laws to bring in cheaper foreign labor.

That's followed at 4:00 p.m. Eastern by "CNN LIVE SUNDAY," with reports on all the day's top headlines.

And at 5:00 p.m. Eastern, "NEXT@CNN" looks at the biggest engineering project ever, a mega project with potential mega problems.

(LAUGHTER)

I want to see what that is.

Be sure to join me next Sunday, every Sunday, at noon Eastern for the last word in Sunday talk.

Monday through Friday, twice a day, noon and 5:00 p.m. Eastern.

Until then, thanks very much for watching. Enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

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